Napster Calls MusicNet Monopolistic; Judge Agrees

MattW writes "Yahoo is carrying an article from the AP about a development in ongoing Napster litigation. Several major labels and RealNetworks formed MusicNet. Napster complained about an anti-competitive clause in the contract they signed with MusicNet, and Marilyn Hall Patel, best known to this community for her stern condemnation of Napster, agreed, stating that MusicNet had all the hallmarks of an anticompetitive business. The article goes on to state that, "If the recording industry was found to have misused its copyrighted material, it might not be able to successfully pursue an infringement claim on those works.""

Re:who /is/ fair?

[Anonymous Coward]

In the case of the fast food chains, it's mostly due to the fact that pepsi or coke actually OWN the companies :P

Re:Other services

[peter_gzowski]

The RIAA is going after the FastTrack [fasttrack.nu] network (KaZaA [kazaa.com], Morpheus [musiccity.com], and Grokster [grokster.com]) next. This is going to be the next big battle, as this network isn't centralized (at least, not as centralized as Napster was), so the RIAA will have a harder time proving that FT is responsible. Another intesting thing about the FT network is that the latest version locks out the open source client that the giFT project [sourceforge.net] is developing (it worked again briefly over the weekend, but now it's broken again). While they try to get it up and running with the new FT network, they say that they're also developing and their own open source network (OpenFT).

In parallel with the FT assault, the RIAA, as of Monday, decided to go after AudioGalaxy (read about it in the NY Post [nypost.com] over here [nypost.com]). AudioGalaxy has filters in place, but the RIAA says they aren't good enough.

Re:Misuse of copyright nulls infringement claims?

[buss_error]

It's black letter law. Use copyright to maintain or establish a monopoly, loose the copyright.
IANAL.

Re:It's never fair

[BradleyUffner]

There is a Subway here in Gaithersburg, MD that has fountains for both coke and pepsi right next to each other. That's the only place I've ever seen it, and it was kind of freaky.

Re:It's never fair

[Bonker]

I used to work at a Pizza Hut, so I'll clear this up.

PH corporation is a subsidary of Pepsi Cola, along with several other big-name fast food chains like Taco Bell and KFC. Most of the PH's across the nation are maintained by several district offices and report directly to PH corporation, and therefore back to Pepsi Cola.

Pepsi considers this an expensive way to do business because, while they profit from those stores (Markup on a Pizza was close to 5000%) they still have to pay wages and administrative costs. I'm not sure of the math, but Pizza Hut beleives they ultimately make more off of Pizza Hut franchises thank they make off of wholly owned stores.

Thus, unlike Taco Bell, there are a great number of Pizza Hut Franchises across the the country. Those franchises are owned by individuals or other companies who pay PH and Pepsi a precentage for the right to use the Pizza Hut logo, recipies and to participate in speicial promotions. Since they are privately owned, the owner has the right to do anything he wants in the way of adding or subtracting things from the menu. Most PH franchises offer Coca-Cola products in addition to or instead of Pepsi products. They may also do things like add or subtract certain toppings that can be ordered on a pizza. Some Franchises opt to not sell Pizza Hut's 'Thin Crust' pizza, because automatic dough rollers are fairly notorious for crushing finger bones.

Re:Nobody's fair.

[haruharaharu]

Ugh. That stuff that scott is spewing may work for the established artist, but try to make a name with it. Now for the Penny-arcade response:

I can't stop Talking! [penny-arcade.com]

Re:It's never fair

[Anonymous Coward]

PH corporation is a subsidary of Pepsi Cola, along with several other big-name fast food chains like Taco Bell and KFC. Most of the PH's across the nation are maintained by several district offices and report directly to PH corporation, and therefore back to Pepsi Cola.

Not any more. See this [triconglobal.com] page:

Tricon became an independent, publicly owned company on October 6, 1997, when four companies (KFC, Pizza Hut, Taco Bell, and PepsiCo Restaurants International) were spun off from PepsiCo.

Re:who /is/ fair?

[skullY]

my boss and I were wondering why someone like Coke or Pepsi is allowed to ensure exclusivity with its distributors (fast food chains, etc)? Whats the difference?

I actually asked a restaurant owner about this once. Appearantly there's nothing stopping a restaurant from carrying both Pepsi and Coke (and/or RC Cola, etc) but the local distributers make it worth their while to carry only one by giving away freebies. You know, small things like soda fountains, glasses, signs, etc. Sometimes they also give them a break on the cost of the syrup and (This is me theorizing here) waiving the deposit on syrup canisters.

Re:Now they're on to something

[raresilk]

both legal remarks not exactly correct (nothing personal).

Under the Brooke Group case, decided by the US Supreme Court in about 1995, oligopolistic collusion to dominate a market can constitute an antitrust violation, even though none of the players has sufficient market power on its own to constitute a monopoly.

You're partially correct in that abusive business conduct might also form the basis for a RICO claim. However, you need certain specific "predicate acts" to support a RICO violation, and although criminal infringement of a copyright is a predicate act, misuse of a copyright is not. So I wouldn't be too quick to assume that this is just the "reverse Napster case" here.

RICO also comes in *both* civil and criminal flavors. Criminal RICO charges would have to be brought by the Justice Dept., and although the penalties sound scary, don't forget that the wheels of government turn slowly, and there's an awfully high burden of proof to convict someone of a crime. (And also, I suspect they're quite caught up in other stuff at Justice right now.)

In contrast, civil RICO claims can be brought by any individual/company who claims to have been "injured in business or property" by the RICO violation. A successful claimant is entitled to treble damages, so although it doesn't sound as threatening as criminal charges, civil RICO is no little mousie.