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Sony and Bertelsmann file appeal against EU ruling overturning merger approval

Sony and Bertelsmann file appeal against EU ruling overturning merger approval

Sony Corp. and Bertelsmann AG have filed an appeal against an EU court ruling that said regulators should not have approved their 2004 merger, the European Court of Justice said Thursday.
The appeal to the EU's highest court was filed Tuesday, a court spokesman said. It was too soon to give a date for a hearing, he said.
In July a lower court, the Court of First Instance, overturned a European Commission decision to clear the deal _ the first time it has done so. It said regulators did not properly show that there was not a monopoly position before the deal or that there would not be one afterward.
Sony and Bertelsmann said at the time that the judgment would make no difference to their business. However, the court ruling forces the Commission to examine the deal again and raises the bar for regulators looking into similar tie-ups.
The Commission had unconditionally approved the 50-50 joint venture between Sony Music and BMG, Bertelsmann's music unit, in July 2004 after finding insufficient evidence the deal would harm consumers.
But the court said regulators did not clearly show why they made a late U-turn after alleging in May 2004 that the deal could exacerbate "tacit collusion" in the industry, leading to higher CD prices and less choice for consumers in a market where there is already too little competition.
The deal, which reduced the number of major music companies from five to four, brought Sony artists like Aerosmith, George Michael and Barbra Streisand and BMG's Avril Lavigne and Elvis Presley under one roof. Sony and BMG argued they needed to join forces to deal with declining CD sales and the threat from illegal downloading on the Internet.


Updated : 2021-04-14 19:08 GMT+08:00