Mergers: Commission approves proposed acquisition of Bertelsmann's 50% share in Sony BMG by Sony
European Commission - IP/08/1322 15/09/2008
Brussels, 15th September 2008
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the 50% share held by Bertelsmann AG of Germany in Sony BMG by Sony Corporation of America. Sony BMG is the recorded music company jointly-owned by Sony and Bertelsmann. After the transaction Sony will become the sole owner of Sony BMG which will be renamed Sony Music Entertainment Inc. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Sony Corporation of America belongs to the Japanese Sony group with activities in consumer electronics, in the entertainment industry, in music recording and music publishing. Sony BMG is a joint venture between Sony and Bertelsmann, approved by the Commission on 19th July 2004 (see IP/04/959) and 3rd October 2007 (see IP/07/1437), and active in the discovery and development of artists and the subsequent marketing and selling of recorded music in physical and digital format.
By the proposed transaction, Sony would acquire full ownership and control of the joint venture. The Commission's investigation found that the transaction would not lead to any horizontal overlaps in the music recording markets, examined at the creation of Sony BMG, as Sony has no other music recording activities in the EEA.
The Commission also investigated whether the combination of the music recording activity of Sony BMG with the music publishing activity of Sony/ATV (its joint venture with the artist Michael Jackson) could have a detrimental effect as regards the joint licensing of publishing and recording rights towards online music retailers. However, the market position of Sony does not raise concern and online retailers would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers.
The Commission also analysed the vertical integration between the activities of Sony in consumer electronics (portable music devices, mobile phones), video games and cinema, and the activities of Sony in music publishing and music recording. The Commission concluded that Sony would continue to have the incentive to sell its music to as many customers of portable music devices, mobile phones, video games and films as possible, and would therefore not restrict access to its music catalogue to competitors in these markets. In any event, Sony's competitors for portable music devices, mobile phones, video games and movies would continue to have access to a sufficiently large portfolio of music rights from alternative suppliers. In addition, Sony would continue to have the incentive to purchase music for its portable music devices, mobile phones, video games and films from different sources.
Finally, the Commission's investigation showed, in line with its previous
findings in the 2004 and 2007 decisions approving the creation of Sony BMG, that
the proposed transaction would be unlikely to induce coordinated effects between