WRITTEN QUESTION E-2371/00 by Glyn Ford (PSE) to the Commission. DVD discs and competition.
Date: 2000-07-13
Institutions: European Parliament, Provisional data
Subjects: disc drive, dominant position, film production, intra-EU trade, literary and artistic property, technical standard, video disc

C 103 E/138

Official Journal of the European Communities

EN

3.4.2001

Answer given by Mr Patten on behalf of the Commission

(12 September 2000)

took up these questions with the Pakistani
The Commission,
authorities on behalf of the Honourable Member, in response to a letter from him of 1st February 2000.

through its delegation in Islamabad,

The authorities in Pakistan have since declared that the year 2000 would be observed in their country as
the Year of human rights and human dignity. At a human rights convention in April 2000, launching this
including the
initiative,
elimination of bonded labour. In these circumstances, the Commission will ask its delegation in Islamabad
to take up these questions once again with the relevant ministry, and will communicate the response to
the Honourable Member.

the Chief executive, General Musharraf, announced a package of measures,

(2001/C 103 E/154)

WRITTEN QUESTION E-2371/00

by Glyn Ford (PSE) to the Commission

(13 July 2000)

Subject: DVD discs and competition

In response to my questions E-1509/00 and E-1510/00 (1) on 14 June, Commissioner Monti justified the
anti-competitive behaviour of producers of DVD players and discs by arguing that the encoding of new
releases according to the region of the world enables the producers of motion pictures to protect their
copyrighted intellectual property and the traditional pattern of releasing their films at different times in
different parts of the world.

I think this is a convenient excuse by the producers of motion pictures to justify sharp differential pricing
around the world. Even if this were to be the case it still provides no justification ONCE the films have
been globally released for not producing them in an (cid:145)all regions(cid:146) version, because at this stage there is no
longer the justification of regional coding being used by film producers to exercise their rights under
copyright law. This leaves the suspicion that the main purpose is profit maximisation by the abuse of a
dominant position.

Will the Commission therefore undertake to contact the producers of DVD discs to say that subsequent
edition, after release in all regions, should not be regionally encoded? If not, would the Commission care to
specify its reason?

(1) OJ C 53 E, 20.2.2001.

Answer given by Mr Monti on behalf of the Commission

(28 September 2000)

In its reply of 14 June 2000 to written questions E-1509/00 and E-1510/00 (1) by the Honourable
Member, the Commission explained that regional coding of digital versatile discs (DVDs) and DVD players
enables film production companies to protect their copyrighted intellectual property and the traditional
pattern of releasing their films at different times in different parts of the world.

With regard to the Honourable Member(cid:146)s present question, the Commission notes firstly that the capability
for regional coding is a technological feature built into DVDs and DVD players. It is part of the standard
specifications for DVD technology. However, it is not the DVDs and DVD players that decide whether or
not a particular film should be regionally encoded. This is decided unilaterally by each film production
company. The Commission therefore interprets the question of the Honourable Member as requesting it to
examine the behaviour of film production companies and not producers of DVD discs.

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Official Journal of the European Communities

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The Commission also recalls that film producers have the option of coding new releases according to six
geographical regions, of which the European Economic Area (EEA) constitutes one. Thus, a DVD movie
released in one Member State could be played in another Member State, a feature enhanced by the
multiple-language capacity of DVDs. Accordingly, the regional coding does not restrict trade between
Member States. However, the regional coding might discourage imports into the EEA of DVD discs
released in one of the other regions and thereby have an effect on trade.

In this context, the antitrust rules only offer limited possibilities for imposing restrictions on the use of
intellectual property rights against imports or parallel imports.

Article 81 (ex Article 85) of the EC Treaty requires the existence of an agreement or concerted practice.
However, in the present case, the film producers decide unilaterally whether or not to regionally encode a
title.

Article 82 (ex Article 86) of the EC Treaty requires abuse of a dominant position. Film production
companies do not enjoy a dominant position in the meaning of Article 82 merely because they are in a
position to prevent third parties from putting into circulation products that infringe upon their rights. At
this stage, there are no other indications that any of the film production companies would enjoy a
dominant position on the relevant market of feature films.

The Honourable Member suggests that the (cid:145)back catalogue(cid:146) of films (films already released) should not be
regional encoded. The Commission would like to point out that regional coding on back catalogue of films
amounts to enforce film production companies(cid:146) rights under copyright. Only under limited and excep-
tional circumstances, e.g. if a dominant film producer were to engage in abusive pricing practices, could
the Commission intervene under the competition rules (2).

Accordingly, as stated in its previous reply (1), the Commission has already investigated these issues (in an
ex-officio proceeding opened in 1996) and has not found any behaviour infringing Article 81 or 82 of the
EC Treaty. In the absence of any new information enabling the Commission to change its view, the
Commission currently has no intention to investigate the matter further.

(1) OJ C 53 E, 20.2.2001.
(2) See, inter alia, the judgement of 16 December 1999 in Case T-198/98 Micro Leader Business v. Commission, not

yet published.

(2001/C 103 E/155)

WRITTEN QUESTION E-2378/00

by Marjo Matikainen-Kallstr(cid:246)m (PPE-DE) to the Commission

Subject: Renewable energy sources and hydroelectric power

(13 July 2000)

According to the recent report by energy Commissioner Loyola de Palacio, the Commission does not
intend, in its new proposal for an energy directive, to grant hydroelectric power the status of a renewable
source of energy. The proposed directive also suggests that Finland should increase its electricity
production by 10 % by 2010 by burning wood. This is a completely impossible objective. According to
the calculations of the Finnish trade and industry ministry, Finland would need to invest some FIM 12 to
15 billion in wood-burning power stations in order for the country to use the required 10 million m3 of
wood in energy production. The burning of wood would also cause a serious shortage of raw materials in
the wood processing industry.

In the light of the above, why does the Commission not want to grant naturally flowing water the status of
a renewable energy source? On what calculations does the Commission base its opinion concerning the
advisability of a radical increase in wood burning? Does the Commission consider this objective sensible in
the light of the environmental consequences of burning wood?