Sony Music Entertainment – Inc. and three other major record and music software companies have denied to the Fair Trade Commission that they are blocking other firms from entering the new “ring-song” mobile phone business, company officials said Monday.
Sony Music issued a statement denying the FTC’s allegation. Avex Network Inc., Victor Entertainment Inc. and the Universal Music Group also denied the charge.
The FTC is expected to hold a hearing on the issue soon.
On March 24, the FTC ordered the four companies as well as Toshiba EMI Ltd. to stop banning other firms from using songs recorded on their CDs for mobile phone ring-tone services. While the five companies were required to respond to the order by Monday, the FTC granted Toshiba EMI’s request for a postponement of two weeks.
According to the FTC, the five companies hold the rights to master recordings that distributors of the ring-tone services need to obtain to start doing business.
Central to the issue is something referred to as the ring-song service, which is an advanced form of ring-tone service. Ring-song allows users to download part of a song, not just the melody, from the artist’s original version for use on mobile phones.
The five firms jointly set up a ring-song firm called Label Mobile Inc. in December 2002, but blocked about 30 other companies from starting up by refusing them permission to use the master versions, according to the FTC, which says the practice violates the Antimonopoly Law.
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