The National Association of Recording Merchandisers (NARM) filed a lawsuit against Sony Music Entertainment and Sony Corp. of America (both units of Sony Corp., Japan), alleging the music company forces record retailers to sell CDs that drive consumers to Sony’s online stores.
The suit claims that Sony is illegally forcing retailers to carry CDs that have software or promotional inserts directing consumers to competing retail locations owned or operated by Sony. The suit specifically cites Sony-owned Columbia House and CDNow.
NARM claims that by driving consumers to such direct response vehicles, Sony is engaged in copyright misuse, illegal price discrimination, unfair competition, and false advertising.
CDNow is about to merge with Columbia House, currently a joint venture between Sony and Time Warner Inc. Time Warner, which is set to merge with America Online, is currently trying to purchase EMI, a competing music company.
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