WRITTEN QUESTION E-2232/02 by Charles Tannock (PPE-DE) to the Commission. CD prices in Europe.
Date: 2002-07-23
Institutions: European Parliament, Provisional data
Subjects: audiovisual industry, commercial law, consumer price, consumer protection, control of restrictive practices, copyright, distributive trades, record, restriction on competition

C 137 E/56

Official Journal of the European Union

EN

12.6.2003

(ii) where there is misuse of aid,

i.e., aid used by the beneficiary in contravention of

the earlier

Commission decision, the Commission may open a formal investigation procedure,

(iii) the Commission decision may be challenged before the Tribunal or Court within a period of two

months after publication of the measure.

Where the Commission has serious doubts as to whether decisions not to raise objections, positive
decisions or conditional decisions with regard to individual aid are complied with, it has the right to
undertake on-site monitoring visits.

The two months period, starting at the date of publication in the Official Journal for bringing a challenge
against Commission decisions is provided for by the EC Treaty.

The Commission gives a very broad dissemination to state aid decisions. A summary information sheet is
published in the Official Journal with a reference to the full text of the decision which is then made
available on the internet. In cases where the Commission initiated the formal investigation procedure,
all third parties who provided comments on the decision to initiate this procedure, will receive a copy of
the final decision. Final decisions are published in full in the Official Journal. All information is also
available on the Directorate General Competition’s website. Finally, for cases which have a wider impact,
press releases will be made. In the area of state aid, 87 press releases were made in the year 2001.

Furthermore, any interested party may inform the Commission of any alleged unlawful aid and any alleged
misuse of aid. Where the Commission takes a decision on a case concerning the subject matter of the
information supplied, it would send a copy of that decision to the interested party.

All the principal relevant facts forming the basis of the assessment of the Commission are mentioned in
the Commission decision, as required under Article 253 of the EC Treaty and Article 6(1) of Council
Regulation (EC) No 659/1999.

A procedure for failure to act under Article 232 of the EC Treaty is not possible for an individual aid
where a market distortion would have arisen only later.

(1) OJ L 83, 27.3.1999.

(2003/C 137 E/063)

WRITTEN QUESTION E-2232/02

by Charles Tannock (PPE-DE) to the Commission

(23 July 2002)

Subject: CD prices in Europe

Last year, Commissioner Monti announced that he would be investigating the price of CDs in Europe.
What are the findings of that study? Can the Commission explain the much higher prices charged for the
same product or essentially the same product, in the European Union compared to the United States or the
divergences within the European Union itself? Does the Commission believe that the higher prices charged
in Europe result principally from the higher wholesale prices charged by the music industry or to higher
mark-ups by retailers, and does the Commission believe that these price differences can be justified on the
grounds of differences in rental and transport costs? At all events, does the Commission believe that there
has been any breach of European Competition Law?

Finally, are there any restrictions on retailers who wish to purchase CDs in the United States, ship them to
Europe and sell them at prices similar to those at which they are sold in the United States?

12.6.2003

EN

Official Journal of the European Union

C 137 E/57

Answer given by Mr Monti on behalf of the Commission

(30 September 2002)

In January 2001 the Commission opened five separate investigations into the vertical relationships
between the five major record companies and their retailers. The investigation focussed on allegations of
retail price maintenance by the ‘majors’ through the use of contracts with retailers where co-operative
advertising arrangements were linked to minimum advertised prices. The Commission’s investigation found
that three of the ‘majors’ were including minimum advertised prices in certain of their co-operative
advertising agreements in Germany. These companies have subsequently ended these activities.

The five music companies involved in these cases were: Bertelsmann Music Group, EMI, Sony Music,
Universal Music and Warner Music.

As the possible infringements were confined to the territory of single Member States, and in line with the
Commission’s policy of decentralising the enforcement of competition law in appropriate cases,
the Commission has informed the relevant national competition authorities of the results of its inquiry. It
was accordingly within the national authorities’ discretion to determine whether or not
further
investigation or action at the national level was appropriate.

The Commission suspended its inquiry in August 2001. More information on the outcome of the
Commission’s inquiry can be found in the press release IP/01/1212 issued on 20 August 2001 at:
http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/01/1212|0|AGED&lg=EN&display=.

The question, as to whether Union/European Economic Area (EU/EEA) retailers can import CDs from the
United States, raises copyright issues. Indeed, the Community Legislator harmonised the distribution right
of performers, phonogram producers, film producers and broadcasters via Article 9 of Directive 92/100/
EEC of 19 November 1992, on rental right and lending right and on certain rights related to copyright in
the field of intellectual property (1). Consequently, these rightholders have the exclusive right to make
available the protected objects (CDs in the present case),
to the public.
The distribution right is subject to Community exhaustion: it is only exhausted within the EEA in respect
of an object where the first sale of that object is made by the rightholder or with his consent in the EEA.
This restriction applies to retailers who purchase CDs in the United States and want to distribute them in
the EEA.

including copies thereof,

However, given the high degree of concentration in the industry, the Commission indicated in its press
release of August 2001,
it will continue to keep the music industry under close scrutiny:
the Commission may re-open its inquiries if additional information comes to light in relation to this or
similar practices.

that

(1) OJ L 346, 27.11.1992.

(2003/C 137 E/064)

WRITTEN QUESTION E-2235/02

by Gabriele Stauner (PPE-DE) to the Commission

Subject: Contracts awarded by the Commission’s legal service

(23 July 2002)

Can the Commission provide me with a list of the subjects of all contracts for legal opinions awarded by
its legal service to outside legal advisers since 1999?

Can the Commission provide me with a full list of the advisers to whom contracts have been awarded
since 1999, stating the total value of the contracts awarded to each adviser?

Can the Commission state in each case whether these contracts were awarded by a proper tendering
procedure or whether they were awarded directly without first being put out to tender?