U.S. Justice Department Probes Blu-ray DVD Standards Group
Jan 26, 2004
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In an increasingly contentious battle to create a global standard for the next generation of digital videodiscs, the U.S. Department of Justice has started a preliminary inquiry into activities of one industry group, led by Sony Corp., Matsushita Electrical Industrial Co., and Philips Electronics NV, that is vying for the lead, according to a The Wall Street Journal report.

The inquiry is part of a battle involving powerful companies from the consumer-electronics, high-technology, and movie industries, over a new format for DVDs. The companies are jockeying to establish a new DVD format capable of playing movies in crystal-clear high-definition video, which requires far more storage space than the standard movies on today's discs.

Similar to past format battles -- such as the Betamax-VHS fight in the videocassette-recorder market of the 1970s -- two powerful camps are quarreling over the design of the successor to the DVD, which they hope will drive sales of a new wave of entertainment gadgets. Also at stake in the battle are potential royalties that could provide significant income to the companies behind the standard that ultimately prevails.

The Justice Department is looking into a coalition of companies known as the Blu-ray group, people familiar with the matter say. Founded by Sony, Matsushita, Philips, and seven other major electronics companies, the group is promoting the Blu-ray disc, a format that can store about six times as much data as a conventional DVD, enough for more than four hours of high-definition video. A person close to the DVD Forum, an official standards-setting body for DVDs that includes hardware and software companies, said the Justice Department is looking into whether the group's members potentially acted in concert to impede the forum's technical progress.

A Justice Department spokeswoman declined to comment. A U.S. spokeswoman for Japan's Sony said the company wasn't aware of any inquiry by the Justice Department. "We know nothing about this," she said.

A Matsushita spokesman in Japan also said he wasn't aware of such an inquiry. A representative for Philips didn't return calls. (Dow Jones, The Wall Street Journal)

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