Thursday, July 13, 2006


Although the actual merger of Sony and BMG didn't really mean much (the big music labels had been happily operating a price-fixing cartel in the US before they reduced in number from five to four), it did appear to threaten at least the appearance of diversity in the recording industry.

Now, though, that faux-diversity could be about to be restored: The European Court of First Instance has overturned the European Commission's approval for their union:

The court said that the Commission did not demonstrate to the requisite legal standard, either the non-existence of a collective dominant position before the concentration or the absence of a risk that such a position would be created as a result of the concentration.

Of course, the Commission might now do a much more in-depth study and discover, magically, that the result of the original investigation (described by the court as "cursory") was, nevertheless, the correct one; even if it doesn't, the actual process of demerging might prove problematic. More likely than the restitution of independent BMG and Sony companies would be an enforced hiving-off of some of the business. And even that, of course, would be years and years and millions of pounds in legal refreshers down the line.

What it does mean, though, is the cosying together of EMI and Warner now looks like it will face much more of a tricky job if either side wants to convince the competition authorities that a merger in their case would be a thoroughly good thing.

The case was brought before the courts by Impala, which apparently isn't a woolly animal at all (well, not entirely), but an indie body which counts the somewhat bullish AIM amongst its members.