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Main >> News Listing >> June 2004 >> Article ID 5201
 Christina & Britney In The Same Label? | Type: Internet Article |
| | European Approval Said to Be Near for Sony and BMG Merger | Jun 17, 2004 | by Paul Meller And Nicola Clark
Summary:
.The merger of Sony Music and BMG would create the world's second-largest recorded music company, bringing together a stable of artists that includes...
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The European Commission is poised to approve a merger between Sony Music and BMG, the music division of the German publisher Bertelsmann, people familiar with the case said today.
"The commission came to the conclusion that there was insufficient evidence to block the deal," one person said on the condition of anonymity.
Another person said regulators had sent a "strong signal" that a decision to clear the deal would be made as early as Friday.
The commission reversed the position it adopted in a formal, 60-page "statement of objections" last month, which said that the world's five major record labels — Universal Music, Sony Music, Warner Music, BMG and EMI Group — exercised "collective dominance" of the industry, controlling 80 percent of the business.
The merger of Sony Music and BMG would create the world's second-largest recorded music company, bringing together a stable of artists that includes Britney Spears, Christina Aguilera, Beyoncé Knowles and Marc Anthony. The two companies still await clearance from regulators in the United States before they can proceed with the deal.
The commission's reversal followed two days of closed-door hearings in Brussels this week in which the companies and opponents of the deal were invited to present their arguments.
Michel Lambot, chairman of Impala, a Brussels-based group that represents more than 1,800 independent record labels, said that he had not been informed by the commission of any plans to approve the deal.
"If it is true, then we will go to court" for an appeal, Mr. Lambot said, referring to the European Court of First Instance in Luxembourg.
Executives at Sony and Bertelsmann declined to comment, as did a commission spokeswoman.
The commission had said it was concerned that the major record labels had the power to tacitly collude to set music prices and that Sony and Bertelsmann could give preferential treatment to Sony BMG artists on the parent companies' distribution networks.
A person familiar with the deliberations said that a so-called "devil's advocate" panel of commission lawyers and economists re-evaluated the regulator's objections in light of the evidence from the hearings as well as written responses submitted by Sony and Bertelsmann. But the decision to drop the objections was taken by the original team of competition officials who studied the deal. "No one was overruled," this person said.
Mario Monti, the competition commissioner, met today with Rolf Schmidt-Holtz, the chief executive of BMG and his Sony Music counterpart, Andrew Lack to discuss the deal, the people familiar with the case said. |
 Source: The New York Times | |
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