Sony BMG Appeals Merger Annulment

By Ed Oswald | Published October 5, 2006, 12:30 PM

Sony and Bertelsmann filed an appeal Thursday of a decision that would break up the world's second biggest music label. The EU's Court of First Instance annuled the merger in July, sending the merger proposal back to the European Commission and ordering the two companies to re-file.

Europe's high court, the Court of Justice, will preside over the case. A decision in the matter is not expected for at least a year, if not longer. In the meantime, however,the EC will have to review the merger and investigate any competition concerns.

The case originally came to the Court of First Instance due to a legal challenge by Independent record label Impala. The company said in a complaint that European antitrust regulators made false assumptions that promotional discounts would inhibit the creation of a monopoly.

The European Court of First Instance agreed, saying, "The commission did not demonstrate to the requisite legal standard either the nonexistence of a collective dominant position before the concentration or the absence of a risk that such a position would be created as a result of the concentration."

Neither Sony nor Bertlesmann had commented publicly on the appeal as of press time.

Comments

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Good.
It's about time someone stepped in for the sake of the music industry, to stop there becoming one gargantuan body presiding over what music is released and what isn't, thus forcing people to listen to only a very limited range of bands. Let alone them then being able to give what they like to artists (very little percentage of the sales - if any) as they would be one of only about 3 companies the band have to choose from if they want to make it big.

Split them up and tell them to get screwed. It's about time someone did.

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What??
Exactly what standing does the EU have over mergers of companies incorporated in other countries?
I can see their denying them a license to operate, but saying they cannot merge?

It would be like DeBeers, who can do essentially what they like, but they cannot have a physical presence in the US.

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BMG is a division Bertelsmann AG, which is based in Germany.

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Big WOW... So 1 market down, and what? 4-5 to go? Not a big deal for $ony I would say.

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It just keeps coming for Sony, doesn't it. Pity them. Well, not so much. Just a little.

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