Sony/BMG respond to EC's merger concerns: EC's objections to BMG/Sony merger prompts majors to prepare case for Brussels hearing later this month.(News)

BMG and Sony will have the chance to reply formally to European Commission concerns about their proposed merger later this month.

The pair, which were last week in receipt of a 50-page statement of objections (SO) by the Commission into the deal, have been invited to an EC oral hearing on the matter in Brussels. It is understood that, despite reports that this hearing would take place next week, it is being scheduled for later this month. However, the hearing will also be open to opposition groups, including European indie group Impala, which is planning a press conference this week to outline its case.

The SO provided the first official sign that the EC is not quite as happy with the proposed merger as many expected.

Several key areas of concern are raised in the document by Competition Directorate General chief Philip Lowe and his boss Mario Monti. Although the statement has so far only been officially published to the two major groups, it is understood that concerns include issues of price collusion, collective dominance and publishing.

At least one source says they were surprised that the EC has raised publishing in its SO. "It looks as if [the EC] are concerned with pricing patterns and evidence of collusion. There are also the horizontal aspects of collective dominance and the vertical elements such as online."

Third parties opposed to the merger have already lobbied Brussels, pressing concerns that Bertelsmann-owned RTL could give preferential access to the Sony BMG music and that the recently-launched Sony Connect service could have unfair access to Sony BMG catalogue. The source adds that, although publishing operations are not part of the merger proposal, the SO "recognises the merger will still have an impact on publishing".

Another insider says the music groups will be comforted by the fact that the SO to case number M3333 is ...