EC’s BMG / Sony objections
p2pnet.net News:- Germany’s BMG, one of the Big Five in Organized Music, has confirmed that it’s received the European Commission’s Statement Of Objections concerning BMG’s hoped-for joint venture with Sony Music Entertainment.
The document is part of the Phase II investigation started by the EC in February 2004 and documents EC concerns.
If the deal goes through, Andrew Lack, Sony Music Entertainment’s chairman and ceo, is slated to run Sony BMG, with Rolf Schmidt-Holtz, chairman and chief executive of BMG, as chairman of the board, the new company to be equally owned by Sony and Bertelsmann.
In December 2003, the two giants signed a binding agreement to combine their recorded music businesses in a joint venture. If it goes through, Sony BMG would have a combined global market share of 25.2%, behind the 25.9% held by Vivendi Universal’s Universal Music Group.
The EC’s ‘Objections’ document, "gives Bertelsmann the opportunity to understand the various issues that have been raised during the course of the European Commission’s investigation and those that remain to be addressed in the latter part of the investigation," says BMG in a statement.
"Bertelsmann welcomes the clarity this step will give to the debate and remains confident about demonstrating, in addressing the remaining concerns, that the merger will not impede competition."
The deal wouldn’t include the parent companies’ businesses in music publishing, physical distribution and manufacturing. Sony Corporation’s recorded music business in Japan, SMEJ, would also be excluded.
