The European Commission is probing the two high-definition disc formats amid an investigation that could seriously shake up high definition in Europe. The Commission has demanded access to all files relating to Hollywood movie studios' deals with Blu-ray and HD DVD .
There is some suspicion surrounding the exclusive deals that the Blu-ray Disc Association (BDA) has signed with some of the movie studios. The feeling is that these exclusive deals could be anti-competitive, and that unfair tactics could have been used by the BDA to seal the deals.
Currently, the Sony-led Blu-ray camp is supported by every single Hollywood movie studio apart from Universal Pictures. Blu-ray is backed exclusively by studios including Sony Pictures, Disney, Twentieth Century Fox, Lionsgate and MGM.
These studios have been ordered by the European Commission to hand over all files relating to their decision to support Blu-ray exclusively.
HD DVD stands to benefit
The titanic battle between HD DVD and Blu-ray is expected to heat up as the year goes on. The promise of massive winner-takes-all royalties is spurring both sides to push hard.
HD DVD is selling more standalone players than the Blu-ray camp. This is due to its significantly lower retail price. HD DVD technology is very similar to existing DVD tech, and so it's much cheaper to manufacture than Blu-ray players.
The Toshiba-led HD DVD camp has vowed to keep its prices lower than those of Blu-ray, and players are now selling in the US for around $299 (£150). The Blu-ray camp is boosted by sales of the PlayStation 3 console which comes with Blu-ray functionality.
If the European Commission finds that Blu-ray's deals with the movie studios has been anti-competitive and unfair, it could lead to the movie studios being forced to cancel their exclusive deals and distribute movies on both formats.
This would be a serious shake up for the market, and a massive bonus for the HD DVD camp.