AOL-TIME WARNER MERGER MEETS RESISTANCE ABROAD
European regulators have their own concerns about the merger of the media titans.
As we reported last week (hitsdailydouble, 8/31), the European Commission has drafted a 45-page statement of objections outlining regulators' concerns about the merger. The commission determined that the merger "would create a dominant position in the markets for online music delivery, music software, Internet dial-up access, broadband Internet access and integrated broadband content as a result of which effective competition would be significantly impeded in the common market."
AOL and Time Warner officials—including TW President Dick Parsons and AOL's head of interactive services Barry Schuler—will meet with the European Commission's competition department in a closed-door meeting tomorrow (9/6) and Thursday (9/7). The companies are expected to go to great lengths to persuade regulators that concerns are unnecessary.
"We look forward to meeting with the European Commission and are confident we'll satisfy them that the AOL-Time Warner merger poses no competitive problems in Europe," said AOL spokeswoman Tricia Primrose. "We'll simply tell them, ‘These aren't the droids you're looking for…move along.'"
While admitting that the EU's objections are noteworthy, analyst Scott Cleland of the Precursor Group asked, "Do they want to police it, do they want that obligation and do they think they can police it adequately?"
The EU is expected to rule on both the AOL-TW merger and the similarly challenged EMI-Warner Music merger by Oct. 4, although, it has until Oct. 18 on the EMI-WMG venture and until Oct. 24 on AOL-TW.
In related news, senior European Commission antitrust official John Temple-Lang resigned, rather than take the position of running merger hearings. According to the Financial Times, Temple-Lang was frustrated by the commission's failure to make merger regulations more transparent.
Temple-Lang's departure follows pressure from companies for the commission to make its merger review process more accountable. Temple-Lang's resignation must be approved by the full 20-member commission. It is not expected to have an impact on the AOL-TW hearings this week.
