Indies seek Sony BMG de-merger after court victory

Independent music companies will this week call for the music giant Sony BMG to be split back into two separate businesses after the European Court of First Instance overturned the European Commission's decision to approve the merger last week.

Helen Smith, lawyer for IMPALA, a trade association representing over 2,000 independent music firms, said that "indies will be looking for a de-merger" because it was hard to see how any remedies the Commission might propose would tackle the problem of collective dominance in the music market.

She added that IMPALA would also lodge a formal complaint to the Commission over plans by Bertelsmann to sell its music publishing business.

The Court of First Instance surprised many legal experts on 13 July when it annulled the Commission's decision of July 2004 to clear the merger. The court said that the Commission had failed to "demonstrate to the requisite legal standard" that there was no collective dominance on the music market or that there was no risk of dominance being created by the merger.

Sony BMG said in a statement that the court's ruling would have no effect on its business and it expected to provide updated information to the Commission so it can make a fresh examination of the case.

The Commission has rejected suggestions that the ruling is a major setback for the credibility of its merger control policy.

But officials do admit that further changes to the merger review process may be necessary.

Independent music companies will this week call for the music giant Sony BMG to be split back into two separate businesses after the European Court of First Instance overturned the European Commission's decision to approve the merger last week.

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