EC gets an earful over music merger

Sony, BMG to hear wedding fate July 22

BRUSSELS — Independent music companies pleaded with the European Commission on Thursday to nix the merger of Sony and BMG, just days before the music giants put their case to antitrust watchdogs.

Sony and Bertelsmann’s BMG will hear by July 22 whether they’ll be allowed to go-ahead with their planned merger, which will create a giant to rival Universal at the top of the $30 billion global music industry.

According to the independents, represented by trade org Impala, the deal should go the way of the Warner/EMI merger in 2000, which was blocked by European Union antitrust authorities for being anti-competitive.

Impala prexy Michel Lambot called the commission’s objections “so fundamental, it’s difficult to imagine remedies that would be sufficiently far-reaching to deal with the EC’s concerns.”

The timing of the call is not accidental: Sony and BMG will put their case behind closed doors on Monday and Tuesday. They will respond to objections to the deal that the commission put to them on May 24. Though these objections remain confidential, they are understood to center on concerns that the new company would have too much control in the emerging online music market.

Sony and BMG have argued that competition from piracy and from other media makes consolidation unavoidable.

Impala VP Patrick Zelnik said, “The music market is full of opportunities, and we need the commission to guarantee access to those for the independents, in the interests of competition, innovation and consumers.”

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