EC to investigate Sony-BMG merger

April 2007

Record labels

The European Commission has announced it is launching a new more detailed investigation into the 2004 merger of Sony and BMG’s record label operations which means competition regulators will now not rule on whether the merged enterprise, SonyBMG, can continue to operate in its current form until July 4th 2007 (now extended by two weeks). The EC is also considering the potential tie up of BMG Music and Universal Music. The EC had been forced to reconsider their approval of the SonyBMG merger after the European Courts of Justice annulled the approval last year. The annulment came after a case brought by independent label trade association IMPALA: IMPALA members have asked the EC to look at specific concerns about their reduced market access including the collective dominance of the majors and co-ordination of  competitive behaviour in retail, radio and television, press and other media, as well as in the vital on-line market. The independents also asked  the Commission to address other vital issues such as cultural diversity (which MEPs also recently highlighted as above), the  role of creativity and small business in the Lisbon strategy, vertical integration, links with sister publishing companies, unfair leveraging of repertoire and review of SonyBMG promises during the first investigation, as well as what has happened since. SonyBMG are also appealing the ECJ decision. As well as the SonyBMG issue and the potential purchase of BMG Music by Universal, the EC is also facing the potential merger of the recorded music arm of EMI with the Warner Music Group, no doubt keeping regulators very busy this summer. Source:

For details of the ECJ decision see The European Court annuls the European Commission’s approval of the Sony BMG merger Case T464/04 Independent Music Publishers and Labels Association v Commission of the European Community Music Law Updates August 2006

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