The European Union’s highest court on Thursday threw out a lower court ruling that annulled the European Commission’s approval of a merger between the Sony Music and BMG record labels.
The European Court of Justice also ordered that the lower court, the Court of First Instance, reconsider its decision in order to review three of five pleas it had not dealt with.
“The Court of Justice sets aside the judgment of the Court of First Instance relating to the Sony BMG joint venture,” the high court said in a statement.
“Since the Court of First Instance examined only two of the five pleas relied on by Impala, the Court of Justice considers that it is not in a position to give a ruling itself on the dispute. It is accordingly referring the case back to the Court of First Instance,” the court said in a statement.
In July 2006, the lower Court of First Instance threw out the Commission decision at the request of Impala, an independent group of music producers.
The lower court said the Commission had taken insufficient care in giving its approval. It should have looked more carefully at whether collective market dominance existed in the music industry and could grow after the merger, the court said.
There has been no practical effect of a flurry of decisions on the case since 2004, but the court ruling reflects on the powers of the Commission, the EU’s executive arm.
The Commission approved the deal for a second time in October 2007, saying it had taken care to meet the standards set by the Court of First Instance.
Impala challenged that second decision in June, again before the Court of First Instance.
The Commission approved the deal for a second time in October 2007, saying it had taken care to meet the standards set by the Court of First Instance.
Impala challenged that second decision in June, again before the Court of First Instance.
The high court’s decision on Thursday, in an appeal by Sony BMG, concerns the annulment by the lower court in July 2006.
The court said the lower court had been wrong to equate a charge sheet, or statement of objections, with conclusive findings of fact.
It also said the lower court made an error in law “in relying on documents submitted by Impala on a confidential basis, since the Commission itself could not have used them for the purposes of adopting a decision, by reason of their confidential nature.”
So far, the decisions have made no practical difference to Japanese electronics and entertainment giant Sony and BMG, owned by Germany’s Bertelsmann. Bertelsmann is intensifying talks with Sony to pull out of the venture, media have reported.
“Impala believes the Commission repeated many of the errors that it made before, despite the court’s judgment in Impala’s favor in 2006,” the group said in a statement in June.
