The European Commission (EC) is to launch a four-month investigation into the planned merger between the music divisions of Bertelsmann AG and Sony Corp.
The European Commission (EC) is to launch a four-month investigation into the planned merger between the music divisions of Bertelsmann AG and Sony Corp. A European Union official tells Billboard.biz that "the Commission has decided to open an in-depth inquiry into the Sony/BMG merger. It will be formally confirmed in a few days."
According to EC insiders, the decision to extend the inquiry was made after a series of critical submissions were received from various corners of the music industry. Interested parties had until yesterday (Jan. 28) to file documents objecting to or supporting the merger. After that initial phase, the EC had to decide whether to enter into what is called "phase two" of the investigation and launch an in-depth probe.
Billboard.biz understands that aside from independent labels body Impala, other parties objecting to the merger include retailers, collecting societies and Sony/BMG competitors. Impala claims the merger would shut out independent competitors and cut consumer choice. One leading European music merchant present at the Midem trade fair in Cannes says "moving from five to four main suppliers is not a good thing and will have an impact of record-pricing policies."
International collecting societies body Cisac is understood to have filed documents raising concern that a reduction of the number of major companies could seriously impact its revenues. In a confidential submission, sources say Universal Music Group warned of a threat to EU competition regulations if Sony's range of electronic consumer products were to be restricted for use with Sony/BMG label artists.