European Commission finally reopens Sony BMG review

July 2007

Record labels

The European Commission has reopened its antitrust probe into the merger of Sony’s recorded music division and Bertelsmann’s recorded music divisions which created Sony BMG – the second largest music company in the world. The commission halted its review of the merger in March after both companies failed to produce crucial documentation on their activity in the European market. “The file is finally complete and the probe has been re-launched,” said a Commission spokesman. A new deadline has been set, with a ruling expected by 10th October. The delay has had significant impact on the industry – whilst the music publishing arms of Universal and BMG have been allowed to merge (after a significant shedding of certain catalogues by BMG including Zomba) the delay is not helpful for Warner Music Group which still looks like it would like to buy EMI – and clearly EMI is up for sale and on the verge of signing itself away to private equity firm Terra Firma. The resurfacing of merger issues could hinder any last-minute bids by Warner for the major.

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