Sony BMG music joint venture

Gold discs
"This judgment is likely to prove helpful both to the Commission and to merging parties. The clarification that the Commission can effectively 'change its mind' following the SO is key to the rights of defence of the merging parties"

This recent judgment of the European Court of Justice ("ECJ") has had a significant impact on the European Commission's handling of Phase II merger control investigations, bringing welcome clarity to important aspects of the administrative process.

A team of lawyers in our Competition group, including partners Philippe Chappatte in London and John Boyce in Brussels, advised Bertelsmann on the initial establishment of the Sony BMG music joint venture (combining Bertelsmann's BMG recorded music business and Sony Music) and its notification to the European Commission under the EC Merger Regulation.

After an in-depth Phase II investigation, during which the Commission issued a formal Statement of Objections ("SO"), the Commission ultimately approved the deal without conditions, and the JV was then put into effect in 2004. However, Impala (representing a group of independent record labels) appealed that unconditional clearance decision to the Court of First Instance ("CFI") which annulled the decision in 2006.

Philippe Chappatte and John Boyce then represented Bertelsmann on the parties' joint appeal against that judgment to the ECJ. The Slaughter and May team also represented Bertelsmann during a second administrative procedure before the Commission, required because of the CFI annulment; that involved a further intensive Phase II investigation culminating in a second unconditional clearance decision in 2007.

 
 

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