EU regulators will reportedly seek more information about the two companies, their potential 50/50 partnership, and the music business in general to determine whether the deal violates EU rules. If approved, a Sony-BMG merger would cut the music industry's "Big Five" major labels to four. EU regulators previously blocked a similar proposal that would have combined EMI Group PLC and Warner Music Group, Inc.
London-based EMI Group PLC on April 8 denied reports that it had inflated sales figures. As part of California State Senator Kevin Murray's investigation of the recording industry, Gene Rumsey, a former executive vice president at EMI Music Distribution, had told California legislators that EMI often hired independent consultants to distort figures reported to Nielsen SoundScan.
Rumsey testified that EMI's independent marketing consultants gave free copies of albums to retailers who then scanned the records more times than they actually sold it to boost sales figures, according to Dow Jones Newswires. An EMI official said the testimony was "a red herring attempt by Avatar Records to divert from a lawsuit EMI has filed to recover more than $1 million Avatar owes EMI from a former distribution deal." The case is still pending.
Rosy sales reports may have lead to a run-up in EMI stock, according to April 1 reports. Stock value of EMI Group PLC more than tripled over the past year, and has continued to gain as the company twice announced that it was shedding "underperforming artists" and cutting back its workforce. EMI is the corporate umbrella for the Beatles, Coldplay, Lenny Kravitz, and Norah Jones, among many others. "EMI's recorded-music sales for the just-ended fiscal year are going to be 'close' to the previous year's level," read one financial report, quoting a company statement. EMI is the only publicly traded company in the music industry.
Apple vs Apple: On April 7, High Court Judge Martin Mann ruled that London would be the venue for a renewed trademark battle between Apple Computer, Inc. and Apple Corps Ltd, the Beatles' record company. Mann rejected a proposal from Cupertino, CA–based Apple Computer that the case be tried in California. Formed in 1977, Apple Computer was reportedly named after the Beatles' label by founder Steve Jobs, a fan of the Fab Four.
The two companies reached agreements in 1981 and 1991 limiting Apple Computer to use of the name for computer products only. The record label claims that the computer company's new iTunes music download service violates that agreement. Judge Mann said he based his venue ruling on the fact that the prior agreements were signed under English law. He also confessed to owning an iPod player.