Well it's nearly the weekend, but time, surely, for some more news on the exciting topic that is the proposed Sony BMG merger. More details of that 'statement of objections', published by the European Commission in response to said merger, have been circulating in the last couple of days.
And it seems the European Commission is really concerned about the dominance the existing five majors already have over CD pricing, and how that dominance may increase should a merger go ahead.
The 51-page report says that, while no formal price fixing goes on between the major labels, informal links and the combined knowledge of their top teams means that CD prices are kept artificially high, despite reduced costs and increased consumer demand. The labels do this, the report argues, by dominating the music retail sector through the allocation of discounts to compliant retailers. This dominance, the competition authorities argue, would increase if the industry consolidated into just four major players.
European Commissioners are also concerned that the major labels will have similar dominance in the growing digital download sector, meaning that ultimately download pricing will also be controlled by five, or four, companies.
Sony and BMG will respond to the European Commission's concerns next week, though in the meantime a spokesman for Sony has told reporters: : "Sony and BMG will continue to work closely with the Commission over the next few weeks and remain confident that the Commission will ultimately find that the Sony BMG joint venture is a pro-competitive response to the challenges faced by the recorded music industry."
As reported yesterday, pan-European independents body IMPALA has already offered their thoughts on the 'statement of objections'. Very much against any merger, they welcomed the findings adding: "The objections are so fundamental it's difficult to imagine remedies that would be sufficiently far-reaching to deal with the EC's concerns. In fact we have gone one step further and asked the Commission to address existing structural problems it has identified. Anti-trust authorities have a vital role in improving the market environment and the right of citizens to have access to diverse cultural expression."