EC halts CD price inquiries

The European Commission said yesterday it was ending an investigation into whether the world's five biggest music companies were colluding with retailers over the price of compact discs (CDs) sold in the EU. But it said it would leave it up to national competition authorities in Germany and Italy to decide whether to start their own investigations.

The EU's competition directorate had announced the inquiry in January, naming the firms at the centre of the probe as EMI, Bertelsmann AG's BMG unit, AOL Time Warner's Warner Music, Sony Corp and Vivendi Universal's Universal Music Group.

The investigation focused on a policy called "minimum advertised pricing" (MAP), under which the record labels subsidised advertising for retailers that agreed not to sell CDs below a minimum price determined by the labels.

The European Commission said yesterday its investigation found that three of the major record companies were including MAPs in some of their co-operative advertising agreements in Germany. These companies, which it did not name, had then ended these activities, it said in a statement.

The probe also uncovered a limited practice by one of the "majors" in Italy that could have the effect of maintaining retail prices, it said. As these possible infringements were confined to the territory of single EU member states, the Commission said it was suspending its own investigation while informing the relevant national competition authorities of the results of its inquiry.

"The national authorities can then determine whether or not further investigation or action at the national level is appropriate," it said.