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EU investigates Blu-Ray & HD DVD

European probe follows competition concerns

The European Union's antitrust regulator has asked Hollywood studios to turn over information about their negotiations with the developers of high-definition DVD formats, giving them until the end of this week to respond.

The European Commission is concerned that exclusive deals struck by some studios with the backers of either the HD DVD or Blu-ray Disc formats may be a sign of anticompetitive activity in the industry.

HD DVD and Blu-ray Disc are competing for the attention of movie studios, which are increasingly releasing their films in high-definition format alongside the regular DVDs carrying standard-definition versions of the films.

The Commission began looking for evidence of a possible infringement of EU antitrust regulations on its own initiative: there have been no complaints from companies in the industry, said Audrey Lemonnier, press officer for the cabinet of European Commissioner for Competition Neelie Kroes.

The Commission wrote to a number of major studios in the first half of June, asking them for information about their dealings with the technology developers, Lemonnier said. She would not say which studios received the letters, or how many were sent. The studios have until Friday to respond, she said.

If the studios' answers give the Commission cause for doubt, it may launch a full investigation, she said.

Film studios Twentieth Century Fox and Walt Disney release their high-definition content exclusively on Blu-ray Disc, although another member of the Blu-ray Disc Association (BDA), Warner Bros Entertainment, has a foot in both camps: It also releases films on HD DVD.

Blu-ray Disc also has the backing of Sony, which uses a Blu-ray Disc player in its PlayStation 3 (PS3) console, and computer makers such as Apple, Dell and HP.

HD DVD has won the backing of Universal Studios, which releases high-definition movies exclusively in HD DVD format, and Microsoft, which uses it in its Xbox 360 game console.

Over a million Blu-ray Discs have been sold to date, and 70 percent of high-definition video discs sold in the first quarter were in the Blu-ray format, according to the BDA.

Anticompetitive activity can ultimately harm consumers, Lemonnier said. But consumers might prefer to see one format dominate the market, as VHS swept away videotape rival Betamax in an earlier battle over formats. As long as the two compete, and film studios choose one or the other, movie buffs are condemned to buy two players, or be unable to watch some films at home.

Representatives for Blu-ray Disc backer Sony and HD DVD supporter Toshiba, and for the DVD Forum, which promotes the HD DVD format, all declined to comment on the Commission's action, saying that it was a matter for the Hollywood studios alone. The studios could not immediately be reached.


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