Sony Music Entertainment together with three major record producers in Japan have filed a lawsuit in the Tokyo High Court challenging a July 2008 ruling by the Japan Fair Trade Commission (JFTC) that the companies engaged in unfair trade practices and concerted refusals to deal. The JFTC’s ruling followed a cease and desist recommendation that was issued by the JFTC on March 24, 2005, but ignored by the companies.
The focus of the JFTC’s investigation was a suspected arrangement among Sony and the other recording companies relating to the use of popular songs as mobile phone ring tones. The companies provided Chaku-Uta services, which sold parts of original recordings for ring tones through a distributor that the companies themselves co-founded. The JFTC found that such arrangement impeded competition because each recording company blocked access to songs by other competing services.
In appealing the JFTC ruling Sony claimed that the each company’s refusal to deal with the other ring tone providers resulted from independent business decisions. The JFTC noted in its decision that it discovered no direct evidence of concerted action and that its findings were based solely on circumstantial evidence.