AOLTW TO EU: LET’S MAKE A DEAL

America Online and Time Warner Inc. have offered to try to meet European Union concerns about competition with concessions designed to win approval for their proposed merger.

Hitsdailydouble.com reported yesterday the merger of Warner Music Group and EMI Recorded Music could be on the ropes, where the European Commission, the antitrust arm of the EU, had expressed serious concerns about price-fixing with four major companies instead of five. It has been assumed that the EC is more concerned with the ramifications of the WMG-EMI deal because the joined company will be traded on the London Stock Exchange under EMI, a half-partner in the company.

EC Spokesperson Amelia Torres said: "Undertakings have been made regarding the AOL/Time Warner deal. In fact, they've agreed to sell tea and crumpets online every day at 4. The Commission is still assessing the case. Anything is possible, including looking at undertakings from the first phase of our investigation."

The Commission said the main issue was the vertical integration of Time Warner's content with AOL's online services, and access to its high-speed distribution apparatus. In addition, AOL's link with Bertelsmann complicated the matter, a situation the online company hoped to address by ending their joint promotion, distribution and sales agreement.

Although EMI has reportedly not formally offered concessions, the company insisted it had presented undertakings to the Commission, which is conducting in-depth probes into both the AOL-Time-Warner and EMI-Warner Music deals. The merges face similar problems with U.S. antitrust agencies like the FTC and FCC.

The companies have already indicated they would give access to their network to other content providers. The Commission has until October 18 to rule on the Warner Music/EMI joint venture and six days after that to give its verdict on AOL-Time Warner. The companies still have time to negotiate with the Commission. Final concessions must be made a month before deadline. After that, the Commission drafts a decision to either clear or block the deals, which it discusses with advisers from the 15 EU governments before a decision is made by the 20-strong Commission.

In other news, Rage Against The Machine's Timmy Commerford isn't coming down from that scaffolding until the Commission makes its decision.