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PROBE OF SONY/AWAL DEAL DEEPENS

The U.K.’s Competition and Markets Authority has referred Sony’s purchase of AWAL for an in-depth investigation after Sony failed to address its concerns.

The CMA will look further into the deal with what’s called a Phase 2 investigation, after which the body will decide whether the merger has resulted in, or may be expected to result in, a substantial reduction of competition in the U.K. music industry.

Earlier this month the CMA said the deal could lead to “worse terms for artists and less innovation in the music sector.” It said it found evidence that if AWAL had continued as an independent entity, the two companies could have “competed more strongly with each other in future.” 

Sony, which did not respond within five working days to address the competition concerns, called the findings “perplexing.” A statement read: “We strongly believe this transaction is unambiguously pro-competitive and that our investment in AWAL is key to its continued growth and future success.”

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