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Online Music Joint Ventures: Taken For A Song, Harry First

ExpressO

In 2001 the five major record companies, controlling more than 80 percent of prerecorded music sales in the United States, announced the formation of two joint ventures to distribute music over the Internet. The Department of Justice opened an antitrust investigation into these ventures even before the ventures began their operations. Two and one-half years later the Department announced that it had closed the investigation because its "theoretical concerns ultimately were not supported by the evidence." The Department's investigation, however, focused on the ventures' licensing practices rather than on their formation.

This paper focuses on the formation of the online …