Too Much Information

Stopping the clock on its investigation into the Sony-BMG deal because the interested parties were slow to send in their data, the European Commission has now collected enough data to resume.

There has been a three-month delay while other major record companies and the indie sector sent in hundreds of pages of evidence. It’s expected to take until October for the commissioners to sift through it.

The EC ruling will also have implications for any tie-up between Warner Music and EMI, should the U.S. giant step in to make a counter bid for the beleaguered English company.

Five weeks ago, the EMI board recommended shareholders accept a 265 pence per share offer from leading European private equity firm Terra Firma.

The U.K. media has spent tons of ink speculating whether Edgar J. Bronfman’s U.S. major will come in with a higher offer – or even if its main backers (Bain Capital and Thomas H. Lee) would sanction it. But so far, no bid has been forthcoming.A combined Warner-EMI would have a similar market share to Sony-BMG.

The Commission is concentrating on whether further mergers will lead to tacit collusion between the majors, which would result in a lack of competition if they all set similar prices.

It’s demanded pricing information from each of the companies across the European Economic Area’s 15 countries and for each of their top 20 retailers.

This is the second time Brussels has had to examine the Sony-BMG merger. Last year the European Court Of First Instance ruled that the Commission’s first look at the deal wasn’t thorough enough and therefore the approval was not properly reasoned.

The length and depth of the current investigation suggests the EC is determined not to have its second ruling overturned in the same way.