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U, Warners music arms slapped with Oz fines

Court almost doubles earlier penalities

SYDNEY–The Australian arms of Warner Music and Universal Music have each been fined $A1 million ($650,000) for breaching the Trade Practices Act by refusing to supply retailers who stocked imported CDs.

The Federal Court also imposed fines of $29,250 each on two former Polygram execs and two Warner Music execs.

Friday’s ruling came after Warner and Universal appealed an earlier decision in the case brought by the Australian Competition and Consumer Commission.

The Federal Court nearly doubled its earlier penalties on the companies after finding they had tried to “snuff out the emergence of a form of competition opened up in the interests of consumers by amendments to the Copyright Act.”

“This decision is important as it sends a strong message to those who would attempt to influence retailers against stocking the often cheaper parallel-imported CDs in competition with Australian-made CDs,” said ACCC chairman Graeme Samuel. “Consumers can benefit also from the lower prices and greater choice.”

It placed injunctions on Warner and U preventing them from engaging in exclusive dealing with the purpose of lessening competition in the Australian recorded music market.