Why can't Europe just stay out?

The European commission is informally investigating the high definition DVD market as they are concerned movie studios committing to one format (HD-DVD or Blu-ray) is restricting competition.

Why should it matter if movie studios pick one format over the other? Surely the fact we have two rival formats competing with one another increases competition. Interfering with that will reduce it. Prices of Blu-ray players have already started to fall as they are so much more expensive than HD-DVD players.

Likewise if studios choose to only release movies on one format, that is their decision and they risk losing out by the number of movies they could have sold on both formats. They must of calculated that it is worth while choosing to release in only one format.

Let’s leave them to do battle until a winner (or dominate format) emerges. In the mean time, standard DVD will surfice, until the new format war drives down the price of HD.