The high price charged by Hollywood film companies to European DVD buyers is to be the subject of an investigation by Brussels.
Mario Monti, the European Union's competition commissioner, said yesterday he had written to seven American companies over their pricing policies. DVDs cost between £13 and £20 in Britain, compared with the $15-$25 (£11-£18) American consumers pay.
The market for Digital Versatile Discs has grown fourfold in the past two years, as consumers replace their videotape collections with the digital discs.
But European consumers are unable to take advantage of cheaper DVDs on sale elsewhere because American versions are incompatible with their equipment. DVDs are given regional copyright codes by the manufacturer to restrict use around the world, meaning that discs sold in America often cannot be played in Europe.
Michael Tscherny, European Union spokesman, said: "We sent letters to the seven major distributors to find out whether the US system of 'regional coding' is used to artificially charge higher prices in the EU."
The Commission will try to establish whether these restrictions discriminate against EU consumers.
Mr Monti has said that there is a thin line between protecting intellectual property and abusing a dominant position.
A similar inquiry was launched into alleged unfair compact disc pricing in February. It also coincides with the European Competition Day, designed to highlight the benefits of competition and the role played by the European Commission.
Film companies argue that they divide the world into regions to make the collection of royalties easier and to avoid the risk of piracy.
A spokeswoman for the British Video Association, which represents the DVD and video industry in Britain, said: "The situation with DVDs is that they have been on the market for a good 18 months less than in the US," she said. "It's relatively new technology and very expensive to do this stuff in Europe."
She explained that DVDs had to be manufactured separately in mainland Europe and in Britain because this country was subject to different censorship laws. Classification symbols on products varied from country to country, and had to display the correct one to be sold legally, she said. "Pricing is higher in the UK for every product you can imagine," she added. "This is because of VAT and the rent per foot for retailers being 20 per cent higher than in the States. The fact that the minimum wage and fuel prices are higher affects our prices."
A spokesman for HMV said that to highlight certain DVDs for price comparisons was unfair, because a large share of the market was composed of special offers.Reuse content