L 62/30 Official Journal of the European Union 9.3.2005 COMMISSION DECISION of 19 July 2004 declaring a concentration compatible with the common market and the functioning of the EEA Agreement (Case No COMP/M.3333 — SONY/BMG) (notified under document number C(2004) 2815) (Only the English text is authentic) (Text with EEA relevance) (2005/188/EC) On 19 July 2004 the Commission adopted a Decision in a merger case under Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (), and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address: http://europa.eu.int/comm/competition/index_en.html On 9 January 2004, the Commission received a notifi- cation under Article 4 of Regulation (EEC) No 4064/89 (the Merger Regulation) of a transaction whereby Bertelsmann AG (Bertelsmann) and Sony Corporation of America, belonging to the Sony group (Sony), contribute the global recorded music businesses of the parties (excluding Sony’s activities in Japan) into a joint venture. This joint venture shall be operated under the name Sony BMG and will be active in the discovery and the development of artists (so-called A&R (%) and the subsequent marketing and sale of recorded music. Sony BMG will not engage in related activities such as music publishing, manufacturing and distribution. Bertelsmann is an international media company with world-wide activities in music recording and publishing, television, radio, book and magazine publishing, print services and book and music clubs. Bertelsmann is active in recorded music through its wholly owned subsidiary Bertelsmann Music Group (BMG). BMG’s record labels include Arista Records, Jive Records, Zomba and RCA. Sony is globally active in music recording and publishing, industrial and consumer electronics, and entertainment. In recorded music it acts through Sony Music Enter- tainment. Sony’s labels include Columbia Records Group, Epic Records Group and Sony Classical. The Advisory Committee on Concentrations, at its 127th meeting, on 9 July 2004, delivered a favourable opinion on a draft Decision granting clearance submitted to it by the Commission. () OJ L 395, 30.12.1989, p. 1. Regulation as last amended by Regu- lation (EC) No 1310/97 (O] L 180, 9.7.1997, p. 1). () A&R = Artist and Repertoire; the music industry’s equivalent of research and development. The Hearing Officer, in a report dated 5 July 2004, took the view that the right of the parties to be heard had been respected. I. THE RELEVANT MARKETS Recorded music The Commission found that the relevant product market for recorded music (including A&R and the promotion, sales and marketing of recorded music) might be subdivided into distinct product markets based on genre (such as international pop, local pop, classical music) or for compilations. For the purpose of the present case, however, it could be left open whether the abovementioned genres or categories constitute separate markets, as the concentration would not lead to a creation or strengthening of a dominant position under any market definition considered. The market investigation confirmed a number of factors (e.g. A&R, pricing, sales and marketing mainly taking place nationally, strong demand for local repertoire, and limited international presence of independent record companies) for the relevant geographic markets for recorded music being considered as national. Online music Supported by its findings in the market investigation, the Commission considers that online music is not part of the market for physical recorded music, in particular due to differences in the product and its distribution. It iden- tified two distinct product markets for online music: (i) the wholesale market for licences for online music and (i) the retail market for distribution of online music.