NEW YORK – The Justice Department has launched an antitrust investigation into two joint ventures set up by the world's major record labels to distribute music online to consumers, according to a published report.
The probe will examine potential anti-competitive problems posed by the rival ventures, Pressplay and MusicNet, The Wall Street Journal reported Monday, citing lawyers close to the case. The government will also look into the major record companies' use of copyright rules and licensing practices to control online distribution of their music.
MusicNet and Pressplay are both scheduled to launch this fall as for-pay alternatives to Napster, whose popular, free swapping of copyright songs has been ruled illegal.
MusicNet, based on RealNetworks technology, is owned by AOL Time Warner, EMI Group and Bertelsmann AG and RealNetworks.
Pressplay is working with Microsoft and is jointly owned by Sony and Vivendi Universal.
MusicNet and Pressplay, formerly known as Duet, declined to comment Monday to the Associated Press, as did all five major record labels.
The ventures are already under investigation by European antitrust regulators, who in June stressed the need for a "diversity of service providers."
U.S. lawmakers also have raised questions about whether the two new Internet services would harm competition. The five record labels represent about 80 percent of copyright music.
In a news conference Friday, Rep. Rick Boucher (D-Virginia) introduced a bill that would force the labels to license their online music to others on terms similar to those they grant to their own digital distributors. The Recording Industry Association of America responded in a statement Friday that the new bill "substitutes government regulation for the marketplace."
The two joint ventures expect to charge consumers a monthly fee for access to streamed music.
