U.K. Probe Clears Majors Of Anti-Competition Claims

The U.K. government's Office of Fair Trading (OFT) said yesterday it has closed its investigation into the supply of CDs in Britain, with "no current evidence that the law is being broken." However, the office issued a stark warning to the major record companies that they would face "strong action" if found in breach of competition law.

The OFT launched the probe last year (Bulletin, Feb. 12, 2001), following complaints logged by retailers in December 2000 that a number of leading labels had taken action to limit the parallel importing of CDs into the country from other European Union member states, in a move to maintain higher U.K. prices. The OFT says that during its investigation, it found evidence of past practices by majors to limit parallel imports from Europe.

In its report, published yesterday, the anti-trust watchdog warns that it will re-open its investigation should significant evidence of anti-competitive actions come to light. In the meantime, it vows to keep the U.K. market under review and does not rule out making a reference to the European Competition Commission should anti-trust concerns re-emerge.

The British Phonographic Industry welcomed the outcome but voiced disapproval of what it describes as a "time-consuming, costly, and ultimately unproductive" investigation.

The probe centered on the Competition Act 1998, which bans "cartels, concerted practices, and abusing a dominant position in the market."