An Office of Fair Trading report has cleared the record labels of price fixing in the UK, confirming trading activities it previously deemed ‘unfair’ have ceased. The labels have been accused of blocking imports from elsewhere in Europe where CDs were made available to retailers much cheaper. The result was that records were much more expensive in the UK than abroad. However the latest report, comparing prices across Europe, found that while the UK was more expensive overall, costs were only slightly higher and some albums were cheaper here.
This is the third year the OFT has undertaken this research and they have found CD prices in the UK have in fact fallen in the last two years, from an average price of £11.22 to £10.65. Previous reports had found price fixing activities – principally forcing retailers into anti-competitive agreements in which shops promised not to sell cheap imports. The government agency had told the labels this activity must stop or they risked being fined.
"The major record companies - an international showcase for British talent - must not create barriers to international competition that harm British consumers," the OFT’s John Vickers told the BBC. "Free competition is the way forward, and the industry is on notice that the OFT will act if anti-competitive agreements are found in the future."
The BPI welcomed the latest results - but described the investigation as "time-consuming, costly and ultimately unproductive”. They told reporters: "We can only hope that the regulatory authorities will now allow British record companies to concentrate on producing great British music for our own and the international market."