EC Stops The Clock On Sony-BMG

The indie music companies will no doubt see it as another delaying tactic, but the European Commission has admitted "the clock has stopped" on its re-examination of the Sony-BMG merger because the majors have been late handing in their data.

Impala deputy secretary general Helen Smith said her organization hopes it’s not another Sony-BMG stalling tactic because that’s unacceptable considering the ongoing damage in the marketplace. She prefers to see it as "a positive signal that the EC won’t accept delays or take no for an answer."

The Commission has notified the companies of their "failure to provide

requested information" to the EU regulators, who are a month into their second look at the deal and will be wanting to avoid the accusations of lack of diligence that followed their first enquiry.

The EC allowed the Sony-BMG merger in the summer of 2004, causing a huge protest from the indie sector on the grounds that the Brussels-based monopolies authority hadn’t taken sufficient notice of how much it would marginalize its ability to compete.

Last year the international recorded music business was thrown into a state of flux when the European Court of First Instance backed the indie music companies and said the European Commission hadn’t taken sufficient account of whether the deal would or could lead to the majors gaining further dominance of the market.

Apart from opening up the possibility that Sony and BMG might have to unscramble the omelet, the court ruling also caused Warner to cool its interest in EMI in case that proposed deal also fell foul of the regulatory procedure.

The Commission originally had until July 2nd to make a final decision on whether to clear or block the merger but that deadline is likely to be extended by however long it takes the two majors to hand in the requisite paperwork.