EC to launch UMG-BMG investigation
EmptyThe European Commission has confirmed that it will open an in-depth investigation into Universal Music Group's planned takeover of BMG Music Publishing (HR 12/8).
"The commission's initial market investigation indicates that the proposed merger would raise serious doubts (with regard to) adverse effects on competition in the already concentrated music publishing market," the commission said. "The decision to open an in-depth inquiry does not prejudge the final result of the investigation."
The commission has until April 27 to make its decision.
The commission noted that the recorded music market and the music publishing markets are dominated by the same five vertically integrated companies — Universal, BMG, EMI, Warner and Sony.
It said that during its investigation, it will look at whether the leading position of Universal and the further concentration of the market structure would have a negative impact on fees for publishing rights or on conditions for songwriters in the EU. The commission added that it also will consider the role and position of the collecting societies.
The investigation comes five months after the EU's second-highest court annulled the 2004 Sony-BMG merger. But Universal said that it remains confident that its deal will be cleared despite the court's blow to the commission's authority.
"Although we understand why in the current environment the European Commission has sought more time for its review, we believe, as we have always done, that the merger will be approved," Universal said.
The commission launches a second phase of merger investigations if competition concerns cannot be resolved during the initial, one-month first-phase inquiry. Last month, Vivendi, owner of Universal Music Publishing Group, formally asked the commission to clear its €1.6 billion ($2.1 billion) takeover of BMG Music Publishing. BMG and Universal each have about 11% of the market.