RECORD COMPANIES UNDER INVESTIGATION OVER CD IMPORTS CONTROVERSY

According to the BBC, the Office Of Fair Trading says it has "reasonable grounds" for launching the inquiry...

SONY, UNIVERSAL MUSIC UK, EMI, BERTELSMANN MUSIC GROUP (BMG), WARNER MUSIC, VIRGIN and PINNACLE RECORDS, the UK’s largest independent record distributor, are under investigation as to whether or not they tried to block the import of cheap CDs to the UK.

According to the BBC, the Office Of Fair Trading (OFT) said it had “reasonable grounds for suspecting that record companies had taken concerted action to limit the parallel importing of CDs”.

However, the OFT stressed that at present there were no evidence at present to suggest a breach of the UK’s Competition Act.

Industry watchers have reacted to the news of the investigation with surprise.

“The inquiry surprises me”, said Cliff Dane, Chairman of research group Media Research Publishing.

“Prices are cheaper than they have ever been in the UK. Grey imports have been a big problem for UK labels. What they’ve been doing is releasing special CDs with songs the European version don’t have to make people buy the UK product.”

The companies have until 23 February to respond, and the inquiry is then expected to last six months.