A few months ago the big record labels finally seemed to have tamed their biggest Internet foes, from Napster to MP3.com. But a threat potentially greater than California start-ups lurks on the other side of the country.
The U.S. Department of Justice is growing suspicious of the labels" increasing power, and antitrust investigators are beginning to invite start-ups to closed-door discussions in Washington, D.C., to determine whether the labels are violating antitrust laws.
"We weren"t surprised," said one Internet music executive who received an invitation to a private meeting with the DOJ. "Whether or not this pattern of behavior we"ve seen from record labels does or does not constitute antitrust, it"s certainly (a concern) to us. I wasn"t surprised it was (a concern) to others as well."