NEW YORK -- Sony Music Entertainment, one of the world's biggest music companies, forces record stores to sell CDs that drive consumers to Sony's online stores, a group representing music retailers alleged in a lawsuit on Monday.
The National Association of Recording Merchandisers said it filed the lawsuit against Sony Music and Sony Corp. of America, both units of Japan's Sony Corp. in the U.S. District Court for the District of Columbia.
NARM represents over 1,000 companies engaged in music retailing, wholesaling and distribution.
A Sony representative in New York said no one was immediately available to comment on the lawsuit.
NARM said the suit charges that Sony is illegally forcing retailers to carry compact discs with software and promotional inserts directing consumers to competing retail locations owned or operated by Sony.
The complaint also alleges that Sony has engaged in copyright misuse and illegal price discrimination by favoring its own record club, Columbia House, and online music retailer, CDNow, over other retailers, as well as unfair competition and false advertising.
Online music shop CDNow is set to merge with Columbia House, a joint venture between Sony and Time Warner. It will result in a public company that will be 37 percent held by Sony.
"Retailers have been complaining to Sony since early last year about the practice of using hyperlinks on CD's to divert retail customers to its own retail sites, but the complaints have fallen on deaf ears," NARM president Pamela Horovitz said in a press release.
