Euro Court Reverses Sony BMG Decision

Even as rumors continue to circulate around an impending Sony BMG break, the European Court of Justice last week overturned a decision of a lower court two years ago to annul the merger between the electronics and entertainment giants.

Even as rumors continue to circulate around an impending Sony BMG break, the European Court of Justice last week overturned a decision of a lower court two years ago to annul the merger between the electronics and entertainment giants. In July 2006, the European Court of First Instance threw out a decision made by the European Commission to approve the merger, saying it improperly handled review materials to determine whether or not a joint venture would create a collective market dominance. That initial challenge was prompted by Impala, an independent group of music producers, who provided documents to the lower court in confidence. The higher court rejected the First Instance’s decision due to its reliance on Impala’s objection as solid fact, and only examining two of the five pleas Impala made in the first place.

However, the Commission once again approved the merger last October, saying it had met the First Instance’s standards for such a decision. Until the lower court once again reviews the case according to the Court of Justice’s demands, the Commission’s approval stands. All in all, this comes as a moot point to Sony BMG execs who share a rocky future as is, but nevertheless leaves the company in an unusual legal battle that may take years to resolve.