Sony BMG link up in question

Merger set to be examined

The future of Sony BMG is in confusion following a European court ruling.

The Court of First Instance today (July 13) annulled the European Commission’s 2004 approval of a merger between Sony Music and BMG.

This led to the formation of Sony BMG, now home to Foo Fighters and Bob Dylan among others.

The court ruled that the label was too dominant in the record industry. After the merger, the music industry shrunk from five major companies to four.

The Court of First Instance said in a statement: “The Commission did not demonstrate…the non-existence of a collective dominant position.”

However, Sony BMG denied the ruling would adversely affect the company.

“Today’s judgment does not affect the validity of the Sony BMG joint venture, which has been up and running since August 2004,” they said.