Brussels To Delay Music Giants Planned Merger

18 May 2004

The European Commission is expected to object to the planned merger between Sony Music and Bertelsmann Music Group.

The indications are that tomorrow's announcement will argue that the merger breaks EC anti-competition regulations.

One reason is that the 50-50 deal reduces the number of global music providers from five to four.

It also raises the spectre of "vertical integration" because of Sony Connect, the online music download service.

Rival companies have already expressed concerns about the deal, although Brussels has acknowledged that the merger would be beneficially cost effective for the two giants.

Bertelsmann recently indicated it expected the Commission to ask the duo to formulate a compromise solution.

The Commission is scheduled to give its final decision in late July.

Given the scale of the merger, some observers believe the affair could drag on into the autumn.

Data sourced from Financial Times; additional content by WARC staff