Feds Drop Pressplay, MusicNet Probe

The U.S. Department of Justice has dropped an antitrust investigation of two online music services backed by major record labels after concluding the services have not harmed consumers or competition.

The department reports it has found no evidence that Pressplay and MusicNet have harmed competition or consumers of digital music. Both are joint ventures that music industry companies launched in 2001 to offer digital music online for a price.

The conclusion of the investigation was released in a statement attributed to Assistant Attorney General R. Hewitt Pate on Tuesday.

Market in Motion

Consumers have an increasing variety of places to purchase digital music and are using those services in growing numbers, according to the Justice Department statement. The investigation concludes the labels did not illegally coordinate the terms on which they would license their music to third-party services. What's more, the continuing expansion of the online music market shows the labels did not stifle the industry to protect their competitive positions, according to the Justice Department report.

The department launched its investigation in 2001.

The Justice Department also noted that both Sony Music Entertainment and Universal Music Group have sold their controlling interests in Pressplay, and cited the move as helping to ease governmental concern over the arrangements.

Software vendor Roxio bought Pressplay in May in a cash and stock deal valued at about $39.5 million. MusicNet is a joint venture of Bertelsmann AG, Time Warner, EMI Group, and RealNetworks.