Monday was European Competition day and European Competition Commissioner Mr Mario Monti said his EU directorate is working to combat the anti-competitive policies and pricefixing agreements that conspire to keep prices high.
Mr Monti promised to continue his investigations on the prices paid by EU consumers for DVDs.
A number of EU citizens have written to the Commission to complain that DVDs are selling in the US at significantly lower prices.
It is technologically impossible to simply import the DVDs from the US. The film and record companies that create their content have developed a system with the manufacturers of DVD players that ensures a US DVD does not work on a European DVD player.
The companies are within their rights doing this. Last month, the EU approved the Directive on the Harmonisation of Copyright, which significantly enhances the legal protection of the technology used to control DVD usage.
Even if it were technologically possible to import DVDs from the US, it would still be illegal. The owners of intellectual property rights, such as the copyright in a film or a music album, or a trademark such as Levi's, have the right to control the distribution of their products within the European community. This is known as the "distribution right".
It was first enforced in the Silhouette case, which concerned the manufacturer of up-market spectacle frames. Some 21,000 items of old stock were sold at a knock-down price to a Bulgarian firm, with the proviso that they could only be resold within Bulgaria and the former states of the USSR.
The frames then resurfaced in Austria. Silhouette objected and the European Court of Justice upheld Silhouette's right to control when and where its frames were first sold within Europe.
Although Mr Monti has promised that the record companies will not be allowed to use their technology as "a smokescreen to allow firms to maintain artificially high prices", the extension of the distribution right to copyright works such as music and films sold on DVD was clearly confirmed by the Directive on the Harmonisation of Copyright. It is not clear, however, that EU consumers are in fact being overcharged as a result of the distribution right.
A price survey, commissioned by the British and Swedish governments and published by the Economist Intelligence Unit (EIU), compared average prices for 176 branded goods in four EU countries and the US but was unable to come to any clear conclusions about price differences.
Contrary to popular myth, the cheapest country in which to buy CDs or DVDs is not the US but Germany. Both these countries were significantly cheaper than Britain and the Republic. The survey found that while a CD of U2's album All that you can't leave behind was on sale for £13.56 sterling (€22) in Britain, it cost almost £2 less in the US at £10.59 but was almost £3 less in Germany at £9.66. The position with regard to DVDs was similar. A copy of The Matrix on DVD cost £19.26 in Britain, £15.75 in the US but only £15.61 in Sweden and £15.39 in Germany.
The wide differences between European prices suggests that the distribution right may not necessarily be forcing Europeans to pay higher prices.
Even if this were the case, the effects of the distribution right may soon be limited, following a case brought against Tesco supermarkets by Levis. A preliminary opinion indicates that the controller of distribution - in this case Levis - may not be able to impose blanket bans on the resale of goods in the EU that have previously been offered for sale outside Europe.
This might allow Tesco to recommence the sale of cutprice jeans but may not necessarily reduce the price of European CDs or DVDs, as the distribution right has no effect upon the distribution of goods within Europe. There is no law to prevent a British or Irish retailer driving a truck to Germany, loading up with CDs and DVDs, and realising a substantial profit upon his or her return.
If this was occurring, prices within Europe should equalise quite rapidly. One of the justifications for the euro is that it will clarify the existence of such price differences.
While the EIU survey did not find any clear pattern of price differentials between countries, it did find wide differences in price for individual items, so France appears to be the cheapest EU country in which to buy sporting equipment but Swiss army knives are much cheaper in Germany than elsewhere.
The fact that such differences still exist suggests the EU has some way to go before it sees the practical realisation of the single market, which was to have been created in 1992.
Mr Denis Kelleher is a practising barrister and co-author of Information Technology Law in Ireland (Butterworths: Dublin).
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