EU Court Throws Out Sony BMG Ruling

This is a little confusing at first, so bear with us: Reuters reports that on Thursday, the European Union’s highest court threw out a lower court ruling that had originally annulled the European Commission’s approval of a merger between the Sony Music and BMG record labels.

This isn’t too significant for Sony BMG. It’s more significant for the EU, and its power over mergers. But what’s interesting is that the lower court had said the Commission took insufficient care in giving its approval. “It should have looked more carefully at whether collective market dominance existed in the music industry and could grow after the merger,” the court had said.

Ultimately, whatever happens here could have a profound effect on Sony’s unique position in the industry: it can manufacture MP3 players and other audio equipment, provide software (like the much maligned SonicStage) to organize music, sell music in online stores, and—here’s the key difference from Apple—actually be a music label that signs artists, and creates and records the music itself. None of the other three major record labels are in this kind of position.

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