Does Sony-BMG Deal Open Door For WMG-EMI?

AOK With EU

The SONY and BMG music merger has been approved for the second time by the EUROPEAN COMMISSION in a judgment that, in theory, paves the way for a WARNER/EMI merger, writes U.K.'s TIMESONLINE. EMI was recently bought by GUY HANDS’s TERRA FIRMA private equity group, leading to speculation that he may sell it to WARNER.

In a 330-page analysis, the COMMISSION dismissed objections from independent record labels that the reduction of recorded music companies from five to four would lead to tacit price collusion. It said that "the in-depth investigation has provided no evidence of co-ordinated behaviour prior to the merger or as a result of it."

IMPALA, the trade body for independent labels worldwide, said it would ask the EUROPEAN Ombudsman to investigate "potential maladminstration" in a fresh challenge to the deal.
IMPALA claims that the COMMISSION failed to look at the cultural impacts on "consumer choice and diversity."

SONY BMG is the world’s second-largest recorded music group, with a share of 21.2% last year behind VIVENDI’s UNIVERSAL at 25.7%, but well ahead of the similarly sized WARNER MUSIC and EMI, at 13.8% and 12.8% respectively.

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