International News - US music stores agree price-fixing settlement

Three US music retailers have agreed to contribute to a US$143 million (£94.8 million) settlement package following accusations of price-fixing.

Musicland Stores - a division of Best Buy - Tower Records and Trans World Entertainment, as well as the top five US distributors of CDs, will pay US$67.3 million (£44.6 million) in cash and donate 5.5 million CDs valued at US$75.7 million (£50.2 million) as part of the settlement.

Although the companies denied any wrong doing, the package will be used to satisfy complaints from 43 states that between 1995 and 2000, the companies agreed not to sell CDs below a minimum price that the labels had arranged.

The donated CDs will be distributed to public bodies, such as schools and non-profit-making organisations, while the cash will be used to compensate customers.

In a statement, New York State Attorney General Elliot Spitzer said: 'This is a landmark settlement to address years of illegal price-fixing.'

The five distributors involved in the settlement are Universal Music Group, Sony Music, BMG Music Group, Warner Music Group and EMI Group.

The labels said the policy that had been arranged had helped smaller retailers, which were unable to off-set costs with profits from other areas of their business, to compete with chains such as Wal-Mart.

The original lawsuit filed in August 2000 has since moved to Portland in Maine, where a judge must now approve the deal.