Japanese Music Companies Raided In Ringtone Scandal

Associated Press reports that “Japan’s anti-monopoly agency raided several top record companies Thursday on suspicion they illegally blocked other firms from offering music ringtone services to mobile phone users. Fair Trade Commission official Toshihiko Oizumi said investigators suspect more than 10 companies violated Japan’s fair trade laws by preventing the Japanese mobile phone operators from offering the service.

Sony Music Entertainment, Universal Music, EMI-Toshiba Ltd., Avex Inc., Victor Entertainment Inc. and Label Mobile Inc. were among those raided, said Oizumi. He refused to disclose all the record companies’ names.
The allegations center around the lucrative business of letting mobile phones users download a hit song to play as the ringer, a service first offered in late 2002.

Record companies now hold a dominant share of the industry, estimated at 10 billion yen ($91 million) a year. They charge about 100 yen (90 cents) per song, which includes royalty fees. Downloading a music-only version of a song from phone operators costs 10 yen (9 cents)…Experts estimate that Japanese download some 300,000 songs a day to their mobile phones.”