The European Commission pledged today (July 20) to remain vigilant and monitor the music market. The announcement came the day after the body gave the green light to the planned merger between Sony Mu
The European Commission pledged today (July 20) to remain vigilant and monitor the music market. The announcement came the day after the body gave the green light to the planned merger between Sony Music and BMG.
The EC -- the European Union's antitrust authority -- also warned that it would continue to apply its investigative resources to any further merger plans by the major record companies. "The Commission will keep a close watch on the music sector as it becomes even more concentrated and would very carefully scrutinize any further major concentration in the industry," it says in a statement.
Officials say the EC would particularly examine price fluctuations, a key element of the investigation into Sony BMG.
The EC cleared the merger without conditions after "concluding that it did not have sufficiently strong evidence to oppose the deal." This was despite the EC's Statement of Objections to the merger, which in May accused the five majors of colluding in a tacit cartel.
"On balance, however, the Commission had to conclude, taking into account a deficit in the transparency of the market, that the evidence found was not sufficient to demonstrate in a successful way that coordinated pricing behavior existed in the past and that a reduction from five to four major recording companies would not yet create a collectively held dominant position in the national markets for recorded music in the future," the Commission explains.
The merger covers recording, marketing and A&R at Sony and BMG. It does not include music publishing, manufacturing and physical distribution.
The merger now awaits formal U.S. approval. The Federal Trade Commission is expected to clear the deal shortly, and without conditions. Sources say the deal could close by July 31.
Meanwhile, independents' lobby group Impala has hinted at possible legal action in the EU's courts challenging the regulators' decision. In a statement issued today, the Brussels-based trade group describes the decision as "fundamentally flawed" and warns that it will "consider its options" when it receives a copy of the full ruling.
"This is a sad day for Europe's artists, entrepreneurs, culture, diversity and citizens," says Impala, which has been a vociferous opponent of consolidation in the recorded music industry.