"...The European Commission said on Friday 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 European Union. However, it said it would leave it up to national competition authorities in Germany and Italy to decide whether to start their own investigations. The European Union's competition watchdog had announced the investigation in January, naming the companies at the centre of the probe as EMI Group, Bertelsmann's BMG, Warner Music, Sony and Universal.

The investigation focussed on allegations of retail price maintenance by the big record companies through the use of contracts with retailers where cooperative advertising arrangements were linked to minimum advertised prices. The Commission said its investigation found that three of the major record companies were including minimum advertised prices in some of their cooperative advertising agreements in Germany. These companies, which it did not name, had subsequently 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.

Given the high degree of concentration in the recorded music industry, the Commission said it would continue to keep the industry under close scrutiny and could reopen its investigation if more information came to light about similar practices. The Commission noted that Britain's Office of Fair Trading had launched a separate investigation into allegations that leading record companies were restricting the import of CDs into Britain to try to keep retail prices there high.

The European Commission said it was pushing ahead with its investigation into the price of DVD (digital versatile disc) movies in Europe. European Competition Commissioner Mario Monti disclosed that investigation in June, saying that movie companies and equipment makers had worked together to introduce a worldwide regional coding system for DVDs.

At issue is whether someone who buys a DVD in one region, such as the United States, should be prohibited by mechanical differences from playing that DVD in Europe or other regions. The Commission said on Friday it was concerned that the system prevented EU consumers from benefitting from a broader choice of DVD titles and potentially cheaper prices. All aspects relating to the establishment and operation of the system were being examined, it said. After sending requests for information to all companies concerned by the system, the Commission was currently reviewing the first batch of material it had received, it added..."