Merger control: Commission approves proposed acquisition of Bertelsmann’s 50 % share in Sony BMG by Sony

The Commission has cleared the acquisition of the 50 % share in Sony BMG held by Bertelsmann AG (“Bertelsmann”), of Germany, by Sony Corporation of America (“Sony”), of the United States. Sony belongs to the Japanese Sony group and is active in the market for consumer electronics, in the entertainment industry, in music recording and music publishing. Sony BMG is a joint venture between Sony and Bertelsmann, active in the discovery and development of artists and in the subsequent marketing and selling of recorded music in physical and digital format. After the proposed transaction Sony will acquire the sole ownership and control of the joint venture, which will then be renamed Sony Music Entertainment Inc. The Commission examined, inter alia, whether the combination of Sony BMG’s music recording activity with the music publishing activity of Sony/ATV (a joint venture between Sony and the artist Michael Jackson) could have a harmful effect on the joint licensing of publishing and recording rights towards online music retailers. The Commission also analyzed the vertical integration between Sony’s activities in consumer electronics (portable music devices, mobile phones), video games and cinema, and its activities in music publishing and recording. According to the Commission, Sony’s market position does not raise competition concerns as to both online music retailers and Sony’s competitors for consumer electronics, video games and movies, because, inter alia, they would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers. The Commission’s investigation also showed that the proposed acquisition would be unlikely to induce coordinated effects between music companies. The Commission thus concluded that the proposed transaction will not create or strengthen such a dominant market position that would significantly impede effective competition in the EEA or in any substantial part thereof.

Source: Commission Press Release 15/9/2008

Roschier, Attorneys Ltd. - Finland