Today's Wall Street Journel has an article (sorry, no link, going off a piece of newsprint) on New York State Attorney General Elliot Spitzer's latest investigation into the music industry. This one is looking for price collusion in pricing. Ethan Smith's article isn't about the typical suspect -- wholesale prices -- but rather prices in subscription services.

"The concern is that, when selling their music to subscription services, music labels engage in what may amount to a passive form of collusion, resulting from their use of 'most favored nation status' clauses, as they are known in the trade. Unlike downloading services -- in which labels sell songs to retailers for a set wholesale price -- the prices charged to subscription services are derived from complex licensing agreements. The most-favored-nation clauses, or MFNs, seek to ensure that if a rival label negotiates better deal terms, the label with most-favored-nation status gets the same terms. Critics say that, because all of the major labels have sought or secured such clauses from subscription-music services, the result is anticompetitive."

Not surprisingly, there's no one point of view on the MFNs. A Universal Music Group spokesperson put it this way: "Universal is committed to providing our artists with the best possible service and this includes protecting them as their music is used and exploited in new and different ways." Then president of the American Antitrust Institute said, "Antitrust enforcers seem to recognize most-favored nation as a red flag." And said Jonathan Potter, executive director of the Digital Media Association, "The MFNs of a few years ago were not as aggressive."

The Los Angeles Times ran a similar article today but didn't concentrate on the contracts for subscription services. It does have, though, the same difference of opinions. Potter told the Times that labels were insistant upon MFNs and in a roundabout way called the practice collusion. Anonymous music executives said the MFNs were needed to facilitate a growing market. "The music industry wanted to establish the online marketplace as quickly as possible, but we didn't want to get bogged down in debates over prices," said the executive.

Wrote technology lawyer Rob Hyndeman at his blog, "I thought an associate in a NY law firm was a tool for delivering offerings quickly."