p2pnet - rss feed: EC to probe Sony-BMG merger
p2pnet.net News:- The European Commission is launching a full-scale investigation into the proposed merger of Germany’s Bertelsmann AG and Japan’s Sony Corp global recorded music businesses.
“After a routine, one-month review, the Commission has decided to investigate whether the deal might create or strengthen a collective dominant position between the remaining four major record companies - Universal, SonyBMG, Warner and EMI - in the recording market,” it says in a statement here.
“In the course of the investigation, the Commission will also investigate further competition concerns related to the vertical integration of the parent companies in other markets (television, for example, for Bertelsmann, and music downloading services/portable music players, for Sony).”
Sony and Bertelsmann last month went looking for clearance under the European Union’s Merger Regulation for plans to combine their global recorded music businesses in a joint venture to be called SonyBMG, leaving their music publishing, manufacturing and record distribution concerns separate.
“The remaining four major players would hold approximately 80% of the recording market both on a European level and in most national markets in the European Economic Area,” says the statement. “The rest of the market is characterised by a large number of mostly smaller players active on a national level.
“SonyBMG and Universal alone would account for approximately half of the recorded music market.”
Bertelsmann is a leader in European TV and radio broadcasting through its RTL subsidiaries and, “the concern expressed by third parties is that it could give preferential access to SonyBMG music, foreclosing competing record companies from equal access to the TV/radio markets in some countries,” says the EC, continuing:
“Sony, on the other hand, announced the launch, this spring, of a music downloading service called ‘Sony Connect’ and it has an extensive range of consumer electronic devices that play digital music, in particular portable digital music players. Here too, some third parties have expressed concern that Sony, on the basis of its proprietary technology for music downloading, could foreclose competitors in the markets for music downloading services and portable digital music players from access to SonyBMG’s music library.”
The EC emphasises the opening of a “second-stage merger investigation” doesn’t pre-judge its conclusions and that a final decision must be reached by June 22 at the latest.
