[The Attorneys General] said the record companies in February 1995 conspired to force several large discount retailers to raise prices after the retailers bought CDs in such large volume that they could undercut the prevailing high retail prices.
“The purpose of the illegal agreements was to raise prices and reduce retail price competition which threatened the high and stable profit margins for CDs enjoyed by both the defendant labels and distributors and many music retailers,” the lawsuit said.
The deals initially drew vigorous protests from discount retailers but the chains eventually gave up because the financial penalty for not participating in the scheme was too costly, the lawsuit said.
As a result, CD prices stabilized and then rose, the lawsuit said.
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