The European Commission (EC) has approved the mega-merger between Japan’s Sony and Germany’s Bertelsmann for the second time in three years.
Today’s decision by the EC comes after a second investigation was launched in January into the merger that has created the world’s second-largest music firm, the joint venture Sony BMG, co-owned by its two parents.
The merger first won clearance from the EC’s competition regulator, DG-Comp, in 2004 but that decision was infamously overturned last year by the Court of First Instance (CFI) after the two companies had taken steps to combine their businesses. The parties appealed this decision at the European Court of Justice and that petition is ongoing.
Cleary Gottlieb Steen & Hamilton has been advising Sony Corporation of America as well as Sony BMG on the merger renotification while Slaughter and May advised BMG on the original merger and has been continuing its advice to Bertelsmann on the new investigation. Both firms are advising the parties on the appeal.
At Cleary, competition partners Nick Levy and Robert Snelders led the team, while competition partner Philippe Chappatte has been heading the Slaughters team.
The EC announced today: “The in-depth investigation has provided no evidence of coordinated behaviour prior to the merger or as a result of it. This finding relates to both the markets for music in physical format and in digital format.”
The Phase II investigation was one of the biggest merger clearance probes that DG-Comp has undertaken to date.
The Independent Music Publishers and Labels Association (IMPALA), whose application over the original clearance launched the appeal at the CFI, has vowed to fight today’s decision.
In 2004, Impala was advised by senior partner Scott Crosby and of counsel Jane Golding of Brussels-based competition specialist Crosby Houben & Aps.
The appeal by Sony and Bertlesmann to the ECJ will be heard next month. Potentially, the ECJ could in turn annul last year’s CFI’s decision, which would make DG-Comp’s new investigation ultimately unnecessary.