EU sets full probe into Sony-BMG

Decision expected to be made within four months

By ANDY STERN

BRUSSELS -- European Union executive arm the Commission has confirmed it is launching a full investigation into the proposed merger between Sony Music and Bertelsmann Music Group (BMG).

Brussels said its initial monthlong review showed that "the transaction might create or strengthen a collective dominant position of the major record companies in the markets for recorded music."

Due to the EU's recently revised merger control procedure, a decision should take no more than four months.

This means it will be June 22 before Sony and BMG learn their fate.

Independent record label body Impala welcomed the news.

Patrick Zelnik, org veep and prexy of Naove, said the EU's initial probe showed that a detailed investigation was required. "We will demonstrate the full impact of the merger across the whole music sector," he said. "We will ensure that the market delivers consumer value and choice."

Impala was instrumental in persuading Brussels to block a similar deal between EMI and Warner in 2000.

Indie competitors fear being shut out of the market if the deal gets the go-ahead, with a combined Sony-BMG, alongside market leader Universal, threatening to command more than half the European market. Those three plus EMI and Warner already hold 80%.

Opponents of the deal also argue that BMG's extensive interests in European TV and radio could mean artists from other labels are denied airtime, and that Sony's upcoming music download service could bar competitors and incompatible digital players from access.