FTC RULES AGAINST LABEL IN THREE TENORS SUIT

Upholds Conspiracy Charges Against Vivendi Universal

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WASHINGTON (AdAge.com) -- The Federal Trade Commission today upheld charges against Vivendi Universal of conspiring to curb discounting and advertising for one of the recordings by the Three Tenors.

The Federal Trade Commission upheld the agency staff's complaint that Polygram, a predecessor of Vivendi Universal,

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illegally conspired with Warner Music in promoting a Paris recording of the three tenors. While Warner, now part of AOL Time Warner, earlier settled the case Vivendi had challenged the ruling that a 10-week moratorium on promoting other recordings of the tenors was illegal. Vivendi said it would appeal.

World Cup concerts
The Three Tenors -- Jose Carreras, Placido Domingo and Luciano Pavorotti -- had performed and recorded live since 1990 at the site of World Cup soccer tournaments. The record companies' restrictions included a 10-week moratorium on discounting and advertising of the 1990 and 1994 concerts.

The 1990 album was distributed by PolyGram; the latter by Warner. The two companies in 1997 formed a joint venture to distribute the third album with Warner handling U.S. sales and PolyGram overseas sales. The FTC said Warner and PolyGram, concerned that the Paris concert wouldn't be as commercially viable as recordings already on the market, had illegally agreed to the moratorium on the earlier Three Tenor products.

"We strongly disagree with the decision of the FTC," Vivendi's Universal Music Group said in a statement. The company said it would appeal.

The FTC had first filed the case in 2001. Warner agreed to settle the case in 2001 by stipulating that it would not take such actions again.

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