May 14, 2000 — Retail prices of compact discs are likely to drop in the coming months, thanks to a Federal Trade Commission action ending an industry-wide price-support policy begun five years ago. On May 10, the FTC announced that it had reached an agreement with the “Big Five” of the music business—Time Warner Inc.’s Warner Music, Seagram Ltd.’s Universal Music, Sony Music Entertainment, BMG Entertainment, and EMI Group PLC—that will effectively end the practice of “minimum advertised pricing” (MAP) instituted as a response to music-retailing price wars in the mid-1990s. Under MAP, retailers were forbidden to advertise CDs below an established minimum, at the risk of losing millions of promotional dollars from the record labels.MAP, in the FTC’s view, is a form of price-fixing...
“MAP, in the FTC’s view, is a form of price-fixing...”
What the heck do I care what the FTC says? They’re not interested in anything more than legal niceties. Whatever some lawmakers, motivated by the falsehoods of perfect competition theory, said was bad a century ago is bad now. No matter that no consumer in the history of the world was ever hurt by price agreements between private companies. Try reading Friedman or Armentano, who know a little more about reality than the bureaucrats at the FTC.