EC tables Sony BMG probe
Says it hasn't received vital dataBRUSSELS -- The European Commission has temporarily halted its antitrust investigation into the merger of Sony and Bertelsmann's recorded music divisions as it awaits key data from the two music giants on the European music market.
The EC said Friday: "Please note that the commission (Thursday) sent an Article 11 decision to the parties involved in the Sony/BMG merger for failure to provide requested information. This means that the clock has stopped on this case until such time as the information is received."
The commission pointed out that the investigation was examining an exceptionally difficult case. "On the one hand," it said, "the market is characterized by the strong position of a small number of major players. On the other hand, the entire industry has been going through significant changes in terms of, e.g., digitalization of music and changing consumer behaviors."
The EC also noted that the investigation is unusual as it was being conducted after the completion of the merger. In July, an EU court annulled the commission's original 2004 decision to clear the tie-up that eventually created Sony BMG Music Entertainment, ruling that the EC had not properly investigated the potential consequences of the merger.
The commission launched its in-depth investigation March 1, and under the European Union's strict merger inquiry guidelines, it has 90 working days to take a final decision.
The decision to temporarily stop the clock is an indication of the expanding depth and breadth of its probe. The commission has sought an unprecedented volume of information from the principals to the deal, as well as their competitors and other players in the market. The delay, probably for two weeks, will allow the EC to demand even more input.
Extensions of this kind have become increasingly common in the EU. And recent changes to the EU Merger Regulation give the staff additional time on a case, almost as a matter of course.