The final chapter in the used-CD controversy quietly closed last week when four of the big six record distributors settled claims brought by a group of independent music retailers.
The retailers filed suit last year against Sony, CEMA, WEA and Uni, claiming the distribs violated antitrust laws when they withheld co-op advertising funds from stores that sold the used discs.
The controversy was sparked last year when retail chain Wherehouse said it would begin offering used CDs in several of its 339 stores.
Singer Garth Brooks jumped into the fray, saying he objected to the sale of used discs because it ended the revenue stream that flows to songwriters and publishers of his songs. At the time, Brooks’ distrib, CEMA, said it would not sell the singer’s Liberty Records album “In Pieces” to stores selling used product, but reversed itself two weeks later.
Wherehouse filed its lawsuit after the four distribs said the chain would no longer receive co-op ad support. The suit against CEMA was settled last August when it said it would restore ad support. The three other distribs later settled as well.
The suit brought by the Independent Music Retailers Assn. was the last holdover in the used CD debacle. Also involved in the recent settlement were retailers Repeat the Beat, Record & Tape Trader Inc. and Nothing Beats Fun Inc.
While the court must approve the final settlement — a May court date has been set — it is unlikely any challenges will be raised. Terms call for the chains to receive a restoration of the co-op funds and a formula for retroactively crediting the withheld portion.