EU Continues Probe of HD Video Formats

A slowly simmering probe by the European Union into the format war has taken a new turn.

EU antitrust regulators have requested that a number Hollywood studios turn over information about their negotiations with electronics manufacturers involved in HD technology. Concerned about violations of European antitrust regulations and the anticompetitive nature of exclusive deals with technology developers, the European Commission has given until the end of last week for the studios to respond.

EU examines high-def DVD formats over competition concerns

The probe dates back to July of last year, when the EU sent letters to both Sony and Toshiba, manufacturers of Blu-ray and HD-DVD technology respectively, requesting information regarding licensing practices. At the time, the Commission would not say exactly what aspect of licensing was under scrutiny, only that the action was not yet a formal investigation and further action depended on the responses received.

Now, a year later, we see the nature of the probe taking shape.

The European Commission for Competition’s concern apparently is over movie studios taking sides thereby limiting consumer choice of format. Antitrust is regulated by articles 81 and 82 of the EC treaty; article 81 focuses on agreements between companies that limit competition while article 82 deals with abuse by companies with a dominant market position to the detriment of competition.

In particular, violations of article 81 would seem to be the most likely in question.

As much as the marketing types try to hype it and distract the consumer from the truth, the format war has really become a war between studios about favorite movies. To that end, developers of the competing technologies have attempted to stack the deck in their favor by limiting the amount of software available to the competition through exclusive deals. In execution, the format war is not about which way people prefer their ones and zeros encoded on physical media, with the studios taking sides, it is about which group of movies the consumer prefers more: the movies that can only be watched on Blu-Ray and the movies that can only be watched on HD-DVD.

What also is interesting is that one of the primary backers of one format, Sony Corporation, would seem to have a bit of a conflict of interest in marketing claims that Blu-Ray is an inherently superior format for HD media for consumers. Through subsidiaries, Sony Pictures Entertainment and Sony Computer Entertainment, Sony stands to gain on both the hardware and software fronts.

With luck, for consumers, these probes will blossom into full-blown regulatory action. It can only be good for consumers when they actually can decide which format they prefer and get any movie they want on either format.