KFTC Fines Music Companies

Korea’s Fair Trade Commission has fined 15 music companies the equivalent of $19.9 million for rigging prices for digital music downloads.

Five of the companies – SK Telecom, Loen Entertainment, KT Music, Mnet Media and Neowiz Bugs – will also be indicted for criminal activities related to price-fixing, with three CEOs being prosecuted separately.

The FTC says that the 15 companies colluded to set prices after non-DRM (Digital Rights Management) digital songs started to be sold in Korea.

Prior to May 2008, only DRM songs could be downloaded.

However, the companies stopped distributing songs to services that offered unlimited downloads, which are possible with non-DRM songs. The FTC said this concerted action “blocked competition coming from smaller businesses,” thus “equalizing the prices of their products” and “violating the consumer’s right of choice.”