May 13, 2011

Bob Marley May Have Shot The Sheriff, But He Is Not A Product Market

Bob Marley may have been the first Reggae superstar and the writer of such hits as I Shot The Sheriff, but he is not a product market, according to a California federal judge.

The U.S. District Court for the Central District of California has dismissed the antitrust claims in Rock River Communications Inc. v. Universal Music Group Inc., rejecting Rock River’s theory that reggae music – and Bob Marley in particular – is a relevant product market that Universal was monopolizing. 

The litigation stems from Rock River’s 2006 release of remixed Bob Marley and the Wailers recordings titled “Roots, Rock, Remixed.”  Universal, which claimed to have the exclusive right to these recordings, sent “cease and desist” letters to several major music distributors, including Apple Inc.’s iTunes, Amazon and Virgin, who promptly pulled the album from their shelves. 

In response, Rock River sued Universal alleging that it violated Sections 2 and 7 of the Sherman Act by (1) attempting to monopolize the reggae genre of sound records in the United States; and (2) restraining trade and threatening to create a monopoly.  Rock River also sued Universal for allegedly interfering with its prospective economic advantage by sending the cease and desist letters.

Despite nearly three years of litigating the case, Rock River offered paltry evidence as to product market definition, market power and barriers to entry.  In particular, Rock River argued that Universal had monopoly power based on the percentage of Bob Marley albums it has sold.  Rock River alleged that Universal “accounted for 81 percent of the reggae sound recordings sold, and Bob Marley recordings accounted for 76 percent of the total reggae recordings sold.”  In formulating these market share numbers, Rock River simply presented a declaration from a lay witness.  Moreover, Rock River essentially agreed with defendants that there were no barriers to entry in the market for reggae music.

Based on Rock River’s failure to show that there were any genuine issues of material fact, the court granted Universal’s motion for summary judgment on the antitrust claims.  The court held that plaintiff”s proposed product market was “too narrow to be relevant for antirust purposes” as it focused on Bob Marley sound recordings, rather than reggae music as a whole.  The court noted, however, that even if the product market were a single genre of music, Rock River failed to offer evidence regarding either price-sensitivity of the market or that other genres of music are not a reasonable substitute for reggae music.

Finally, the court found that Rock River presented “no cognizable evidence” with respect to market share or any evidence showing that there are barriers to entry in the alleged market. 

The court allowed Rock River’s claim for interference with prospective economic advantage to go forward, finding that there is a question of fact regarding whether Universal indeed had the exclusive right to sell the recordings at issue.

Categories: Antitrust Law and Monopolies, Antitrust Litigation

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