Commission starts infringement proceedings against Spain for its refusal to lift unlawful conditions imposed on E.ON’s bid for Endesa

Following its letter of formal notice to the Spanish Government of October 2006 and February 2007, the Commission concludes that Spain fails to comply with the Commission’s demand to fully withdraw the illegal conditions imposed on E.ON’s bid for Endesa. The conditions had been imposed by the Spanish Energy Regulator in July 2006 and November 2006, but were declared illegal by the Commission in September 2006 and December 2006 respectively. The formal request now sent to the Spanish Government takes the form of a ‘reasoned opinion’, which is the second stage of infringement proceedings under Article 226 of the EC Treaty. If the Spanish authorities do not reply satisfactorily within seven working days, the Commission may decide to refer Spain to the European Court of Justice. [7 March 2007]

Commission re-opens investigation into Sony/BMG recorded music joint-venture

Following the ruling by the Court of First Instance of 13 July 2006 (case T-464/04) on the appeal of the Independent Music Publishers and Label Associations (Impala) against the Commission's decision to approve the merger in July 2004, the Commission has now decided to open an in-depth investigation into the merger of the global recorded music businesses of the German Bertelsmann AG and Japanese Sony Corp. As the CFI considered that the evidence relied on by the Commission to approve the merger was insufficient to explain the decision, the Commission is now re-assessing the transaction. This assessment is carried out under the previous Merger Regulation (4064/89) as it applies to a merger agreement signed before 1 May 2004, but the Commission will evaluate the transaction in the light of current market conditions taking into account developments since 2004 including the growing sales of online music. As in the 2004 investigation, the focus of the current extensive market investigation will be whether the merger will create or strengthen a collective dominant position among major music recording companies. The Commission's final decision can be expected mid 2007, as the Commission has four months to reach a final decision. [1 March 2007]