‘Too Hasty’ Over Sony-BMG?

Making the wrong call when the Sony-BMG merger came to Brussels the first time around hasn’t stopped sections of the U.K. press from sticking with the view that it will be cleared "without conditions" in the end.

The European Commission is expected to give its ruling by October 10, but the decision could come sooner.

Newly appointed IMPALA secretary general Helen Smith, part of the team that led the indie opposition that derailed the Sony-BMG deal in the first place, told Pollstar she warned a Financial Times journalist not to be "too hasty" in saying that Sony-BMG looks set to win "unconditional backing" from the European Union’s top antitrust regulator.

It didn’t stop the paper from saying it, although Smith – who moved over from co-heading KEA European Affairs at the beginning of August – has good reason to expect any backing would be anything but unconditional.

After a year of legal uncertainty that began with the European Court’s annulment of the EC’s original 2004 decision, because the court felt the regulators needed to take a closer look at it, Smith seems more than hopeful that any approval of the merger is likely to be conditional.

"We understand that the EC found problems that needed to be resolved and the EC also has to deal with court’s requirements. It would be astonishing if the EC decided to approve the merger without solving these problems," she told Pollstar.

She said it wouldn’t be wise to read too much into the fact that, so far, the EC hasn’t tested any possible conditions and remedies by running them past the rest of the market for comment.

"We’ve been surprised by this case before but that in itself isn’t conclusive either way – other merger remedies have been adopted without market testing," she explained.

The Financial Times piece suggested the time remaining until October 10 is hardly enough for Brussels to take the formal steps required to block the deal or ask for remedies such as spin-offs – or even a promise by Sony BMG to change its business conduct.

It did concede that the Commission could still spring a last-minute surprise, although it said the most likely outcome – unconditional approval for the merger – is likely to be a blow to the independent record labels, whose legal challenge against the original 2004 deal clearance triggered last year’s court reversal.