The Canadian government has filed an application to force Warner Music Group to make its products available to BMG Direct, the BMG conglom’s record club.
In an unusual move, the Competition Bureau has asked the Competition Tribunal to order Warner to stop its anti-competitive practices of refusing to supply BMG with product from Warner’s artists. Warner and Sony are partners in the Columbia House Record Club, which is the largest.
The senior deputy director of investigation and research of the Competition Bureau filed an application Tuesday under the Refusal to Deal provisions of the Competition Act asking the Tribunal to order Warner to supply product.
BMG contends it reached an agreement in 1994 with Warner execs that would have given BMG access to their catalog, which is critical for a record club’s list of offerings. Since its launch, BMG has attracted more than 800,000 members.
“Warner Music Group’s refusal to supply BMG with product from its artists has been a blatant attempt to force us out of the market and make Columbia House a monopoly in Canada once again,” George McMillan, prexy-CEO of BMG Direct, told Daily Variety. McMillan said he is hopeful that a hearing date will soon be set.
“The only conclusion one can make of Warner’s reneging on its initial agreement … is that it wants to have exclusive control over the flow of music to record club members in Canada.”
If BMG is allowed access to Warner’s catalog, McMillan said that “music lovers throughout Canada will be the real winners.”
A Warner spokesman said BMG’s claims that a deal existed were without merit.