EC probes CD prices
Diskeries, retailers suspected of colluding
EMI, Bertelsmann's BMG, Warner Music, Sony and Universal will all come under the spotlight during the probe.
The investigation is similar to one undertaken by the U.S. Federal Trade Commission last year that put an end to a practice of record companies enforcing minimum retail prices on CDs.
A spokeswoman said the commission plans to investigate contracts between record companies and retailers, "to establish whether the music majors are pursuing the same or similar retail price maintenance practices in Europe."
If suspicions of collaborative price fixing among Europe's record distributors are found to be true, companies could face hefty fines of up to 10% of their revenue.
'Only the first step'
However, Frances Moore, legal adviser at the Intl. Federation of the Phonographic Industry in Brussels, told Daily Variety: "This is only the first step in an investigative process, not a condemnation of any record companies active in Europe."
In the U.S., the FTC discovered that manufacturers had paid some of the costs for retail record stores to promote certain albums under minimum advertised pricing arrangements. In return, the retailers agreed not to sell these albums for less than the lowest price set by manufacturers.
The move by the EC comes as another setback in Europe for record companies, who are already facing increasing competition from online music distributors.
