EC probe of BMG merger stalls

Companies fail to supply info

The European Commission said Friday that its probe into the 2004 merger of Sony Music and BMG has stalled after the parties failed to submit requested information.

“The clock has stopped on the case until the information is received,” Competition Commission spokeswoman Linda Cain said.

The EC launched a fresh investigation into the merger earlier this month. It had until July 2 to decide on the case. No new deadline was announced Friday.

Cain said the probe is particularly complex since the entire music industry was in a state of flux as a result of the digitization of music and related changes in consumer habits.

In addition, she said, the current investigation is being conducted after completion of the merger, “which is very unusual for the merger regulation.”

The EC’s original approval of the merger in July 2004 was annulled by the European Court of First Instance last summer following an appeal by independent music labels, which said the deal was stifling competition and new talent.

Depending on its findings, the commission could ask for changes to the terms of the Sony/BMG pact, in place since 2004.

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