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Tuesday, 12 June, 2001, 12:33 GMT 13:33 UK
EU opens online music probe
European Competition Commissioner Mario Monti
Mario Monti: 'A number of issues merit close attention'
The European Competition Commission has decided to investigate two online music ventures, set up by leading players in the music industry.

Mario Monti, the competition commissioner, has said he wants to ensure that online music services do not develop at the expense of consumers.

The music market is highly concentrated, so any cooperation between the five majors is regarded as potentially worrying

European Commission
The two ventures being probed are MusicNet - to be launched later this year by AOL Time Warner, Bertelsmann and EMI - and a service formerly known as Duet.

Duet is a collaboration between Vivendi Universal and Sony, and was renamed Pressplay on Monday.

In a speech in Stockholm, Mr Monti said, "These are important cases for the development of music services offered online to consumers, and there are potentially a number of issues which merit close examination."

The former online song-swapping service Napster and RealNetworks, the maker of an internet-based music and video player, are also involved in MusicNet.


The Commission will investigate whether the two ventures involved anti-competitive agreements between the companies.

"The music market is highly concentrated, so any cooperation between the five majors is regarded as potentially worrying," said a spokeswoman for the Commission.

In recent months, the record companies have been falling over themselves to exploit the popularity of online music distribution.

Both MusicNet and Duet/Pressplay hope to charge punters for the download of digital music from the internet.

The exponential success of Napster's free - but now banned - song-swapping service provided the industry with a timely wake-up call.

Following a US court ruling, Napster was forced to clean up its act, but has since formed alliances with the recording companies themselves.

DVD probe

On Monday, the European Commission also said it is to launch an investigation into the high price paid for digital video discs (DVDs) by European consumers.

Because DVDs are cheaper in the US than in Europe, Mr Monti has written to Hollywood film companies asking about their pricing policies.

A similar inquiry into the pricing of compact discs was recently closed after the Commission found little evidence of anti-competitive behaviour by the music companies.

However, the Competition Commission has shown its teeth on occasion.

Last month it slapped a 30.96m euro ($26.4m; 18.6m) fine on Europe's biggest car maker Volkswagen for preventing German car dealers from selling its Passat model at a discount.

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See also:

02 Apr 01 | Business
Music giants form Napster rival
23 Feb 01 | Business
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EU to probe DVD pricing
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Volkswagen slapped with record fine
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EU orders Glaxo price overhaul
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