Source AP ©

Sony Bertelsmann music venture approved

Sony Corp. and Bertelsmann AG received the European Commission’s clearance Wednesday to merge their music units - their second approval after a court ripped up the original OK and told regulators to look at it again.

The EU's executive arm said it had looked carefully at the deal and concluded that "the transaction would not create or strengthen a dominant or collectively dominant position in the music markets" of Europe.

The legality of the deal was called into question when the EU's Court of First Instance criticized regulators for not doing enough to prove that the two companies would not damage the music scene by shrinking the number of major music companies from five to four.

The deal between Sony Corp. and Bertelsmann Music Group formed the world's second-largest record label and brought artists like Shakira, George Michael, Avril Lavigne and Elvis Presley under one roof.

"This investigation represents one of the most thorough analyses of complex information ever undertaken by the Commission," said Neelie Kroes, the EU's antitrust commissioner. "It clearly shows that the merger would not raise competition concerns in any of the affected markets."

In 2006, the European Union's second-highest court backed a challenge from the independent record label group Impala, which represents 2,500 independent music firms. The court ruled that regulators did not properly show that there was not a monopoly position before the deal or that there would not be one afterward.

The Commission said the second investigation included "one of its largest and most complex" antitrust analysis and concluded there was "no evidence of coordinated behavior prior to the merger, or as a result of it."

BMG was a branch of Germany's Bertelsmann AG, an international media group with interests in broadcasting, book and magazine publishing. It joined with the Japanese electronics and entertainment giant Sony Corp. in 2004, saying they needed to join forces to deal with declining CD sales and the threat from illegal downloading on the Internet.

The deal brought together labels such as Arista, Jive, Epic and Columbia.