European Commission Probing Blu-Ray, HD DVD Licensing Deals

European Commission antitrust officials are probing the licensing strategies of two rival new generation DVD developers, HD DVD and Blu-ray Disc, the EU executive said on Thursday.

HD DVD was created by Toshiba Corp, while Blu-ray Disc was developed by a Sony-led consortium which includes Philips (PHG), Samsung and Sharp Corporation.

The two products will be battling for a share in the lucrative audio-visual market providing they can convince consumers they should upgrade from their current DVD standard.

"We have sent a letter earlier this month to the makers of HD DVD and Blu-ray to request information about licensing," a Commission spokesman said, declining to give further information.

The Commission would not name the companies nor say to how many it sent the request for information, but Sony (SNE) confirmed it had received inquiries.

HD DVD was released in April in the United States and has the support of Intel (INTC) and Microsoft (MSFT) and the exclusive backing of General Electric Co.'s (GE) Universal Studios, makers of films such as "King Kong" and "The Bourne Supremacy."

Blu-ray was released last month in the United States, according to its website, and is backed by, amongst others, 20th Century Fox and Metro-Goldwyn-Mayer, who between them made films such as "The Day After Tomorrow," "Star Wars" and "Legally Blonde."

Sony said it was cooperating with the Commission.

"There are no indications of any complaint, nor of any antitrust concerns on the part of the Commission or anyone else," the company said in a statement.

The Commission wants to know whether the licensing terms of the DVD formats could break European Union competition rules, but it said this was not the start of a formal investigation.

The makers of the DVD formats can license their products to both hardware manufacturers wanting to make new DVD players and DVD producers themselves. The Commission declined to say whether it was looking into a specific catergory of licences or all.

Sony and its fellow consortium companies began some licenses in 2003, according to the official Blu-ray Web site, which lists more than 100 licensees in 6 categories, including Hitachi (HIT), Pioneer, Samsung, TDK (TDK) and LG Electronics.

Once the EU's top antitrust authority receives more information from the companies concerned it could decide to either open a formal investigation or drop the case.

Toshiba was not immediately available for comment.