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The European Commission has denied a report that it already made a decision to block Time Warner and EMI’s $20 billion joint music venture. The embarrassed commission responded to a report in the Financial Times on Friday that extensively quoted an internal EU document presenting a strong case against the merger. “It is an internal document,” insisted a spokeswoman for EU competition commissioner Mario Monti. “It is not available, and there is no decision until Oct. 18.” The strongly worded document concluded that it is “highly likely the oligopolists will coordinate prices.” But Fabio Franchino, an EU specialist at the London School of Economics, cautioned against drawing too many conclusions from the draft decision. He said it is a working document that may change, depending on the remedies that are accepted by both parties. “This is part of the process,” he said. “Normally they accept the merger and attach conditions to it.” At the top of the commissioners’ concerns is the size of the new joint venture, which would dominate 40 percent of the global market for recorded music. But that could be remedied in a fairly straightforward selloff of some of EMI’s and Time Warner’s music assets. More troubling and harder to remedy is AOL/Time Warner/EMI’s potential ability to control the supply chain for digital music, from the recording studio to the “buy” button on a Web site to the software required to listen to it. The Independent Music Companies Association (IMPALA), a Brussels-based lobby group, has asked the EU to ensure that the merged company not “dictate the way music or other content will be delivered electronically.” Since licensing regimes and distribution channels are undeveloped on the Internet, critics of the merger are concerned that Warner-EMI could comfortably bypass any intermediaries that would ensure Webcasters and online retailers have equal access to broadcast or sell the music. Warner Music Group declined to comment. A spokesman for EMI said the draft decision is “standard procedure” and that “there is an ongoing dialog with the commission and the discussions are over a settlement.” EMI officials were scheduled to meet with EU commissioners again Monday. Today is the deadline for EMI to submit concessions. Phillipe Kern, secretary general of IMPALA, will hold a press conference next week to react to EMI’s concessions, or lack thereof. “The ball is in their court,” he said. Related Articles from The Industry Standard: AOL, Time Warner � Europe’s Lost That Lovin’ Feeling AOL, Time Warner face the music in Europe Hey, Over Here! Europe’s Got an AOL Story, Too Copyright � 2000 The Industry Standard

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