Brussels approves music merger again
HELENA SPONGENBERG
04.10.2007 @ 09:33 CET
EUOBSERVER / BRUSSELS - The EU's competition authority has for the second time approved a merger between Sony and Bertelsmann's music divisions named Sony BMG Music Entertainment – making it the world's second biggest music company.
The European Commission decision made on Wednesday (3 October) comes after more than a year of legal uncertainty after the EU's second highest court - the European Court of First Instance – last year overturned a previous commission original 2004 decision to clear the deal.
One of the most "thorough analyses" ever undertaken by the commission (Photo: thesetides.com)
The court considered that the EU executive made obvious errors of assessment and that the evidence relied on by the commission was insufficient to justify the clearance decision and annulled it.
"This investigation represents one of the most thorough analyses of complex information ever undertaken by the commission in a merger procedure," said EU competition commissioner Neelie Kroes in a statement.
"It clearly shows that the merger would not raise competition concerns in any of the affected markets," she added.
The commission gave no conditions for the clearance of the merger which could lead to another merger in the sector between Warner Music and EMI Music, which have been following the case closely.
Independent music groups are worried about the effects
The latest move is a blow to the independent record labels, whose legal challenge against the original 2004 merger clearance resulted in last year's court reversal.
IMPALA – an Independent Music Publishers and Labels Association, which represents about 3,500 record labels - callled the decision "bizarre" and "indefensible," and vowed not to give up their legal battles.
"The [commission] has ignored the simple fact that four companies control 95 percent of the music most citizens hear on the radio throughout the world," said Patrick Zelnik from IMPALA.
"What kind of a message does this send to European citizens? That the EU's prioritisation of cultural diversity, creative SMEs and pluralism is purely rhetoric?" he added.
IMPALA also said it will ask the European Ombudsman to investigate potential maladministration, argueing that the EU executive has in its analyses ignored major findings of the EU court in last summer's court decision.