ORDER OF THE COURT OF FIRST INSTANCE (First Chamber)
30 September 2009 (*)
(Competition – Concentration – Sony BMG joint venture – Original decision annulled by the Court of First Instance – New decision declaring the concentration compatible with the common market – Action deprived of purpose – No need to adjudicate)
In Case T‑229/08,
Independent Music Publishers and Labels Association (Impala, association internationale), established in Brussels (Belgium), represented by S. Crosby, J. Golding, Solicitors, and I. Wekstein, lawyer,
applicant,
v
Commission of the European Communities, represented by X. Lewis, F. Arbault and K. Mojzesowicz, acting as Agents,
defendant,
supported by
Sony Corporation of America, established in New York, New York (United States), represented by N. Levy, Barrister, R. Snelders and T. Graf, lawyers,
and by
Bertelsmann AG, established in Gütersloh (Germany), represented by P. Chappatte, J. Boyce and A. Lyle-Smythe, Solicitors,
interveners,
APPLICATION for annulment of Commission Decision C (2007) 4507 of 3 October 2007 declaring compatible with the common market and the functioning of the EEA Agreement a concentration whereby the activities of Sony Corporation of America and Bertelsmann AG in the recorded music sector were combined into a joint venture (Case COMP/M.3333 - Sony/BMG), adopted following the annulment by the judgment delivered in Case T‑464/04 Impala v Commission [2006] ECR II‑2289 of Commission Decision 2005/188/EC of 19 July 2004 declaring a concentration compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.3333 – Sony/BMG) (OJ 2005 L 62, p. 30),
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber),
composed of V. Tiili (Rapporteur), President, F. Dehousse and I. Wiszniewska-Białecka, Judges,
Registrar: E. Coulon,
makes the following
Order
Facts, procedure and forms of order sought
1 The applicant, Independent Music Publishers and Labels Association (Impala, association internationale) (‘Impala’), is an international association governed by Belgian law, whose members are 2 500 independent music production companies.
2 On 9 January 2004, the Commission of the European Communities received notification pursuant to Article 4 of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1), as rectified (OJ 1990 L 257, p. 13) and as amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (OJ 1997 L 180, p. 1), of a proposed concentration by which Bertelsmann and Sony Corporation of America, part of the Sony group, planned to merge their global recorded music businesses.
3 On 20 January 2004, the Commission sent out questionnaires to a number of players on the market. The applicant replied to that questionnaire and lodged a separate submission, in which it set out the reasons why in its view the Commission should declare the concentration incompatible with the common market. The applicant set out its concerns about further concentration in the market for recorded music and the impact that this would have, first, on market access, including in the retail sector, the media and the internet, and, secondly, on consumer choice.
4 By Decision 2005/188/EC of 19 July 2004, the Commission declared the concentration compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.3333 – Sony/BMG) (OJ 2005 L 62, p. 30; ‘the first decision’). Following that decision, Sony BMG Music Entertainment BV (‘Sony BMG’) was incorporated.
5 By application lodged at the Registry of the Court of First Instance on 3 December 2004, registered as Case T‑464/04, the applicant brought an action seeking the annulment of the first decision and put forward five pleas in law in support of that application.
6 Following their applications to that effect, Bertelsmann, Sony BMG and Sony Corporation of America were granted leave to intervene in support of the form of order sought by the Commission in Case T‑464/04.
7 By judgment of 13 July 2006 in Case T‑464/04 Impala v Commission [2006] ECR II‑2289 (‘the judgment of the Court of First Instance’), the Court of First Instance granted the applicant’s application. The Court held that the first and second pleas in law were well founded and accordingly annulled the first decision without examining the other pleas in law raised before it.
8 By application lodged at the Registry of the Court of Justice on 3 October 2006, Bertelsmann and Sony Corporation of America brought an appeal by which they requested that Court to set aside the judgment of the Court of First Instance.
9 On 3 October 2007, the Commission adopted a second decision, by which it once again declared the concentration between Bertelsmann and Sony Corporation of America to be compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.3333 – Sony/BMG).
10 By application lodged at the Registry of the Court of First Instance on 13 June 2008, the applicant brought an action to challenge the decision of 3 October 2007.
11 By separate document lodged on the same date, the applicant requested that the Court adjudicate under an expedited procedure, in accordance with Article 76a of the Rules of Procedure of the Court of First Instance.
12 By judgment of 10 July 2008 in Case C‑413/06 P Bertelsmann and Sony Corporation of America v Impala [2008] ECR I‑4951 (‘the judgment of the Court of Justice’), the Court of Justice set aside the judgment of the Court of First Instance, referred the case back to that Court and reserved the costs.
13 By decision of 15 July 2008, the Court of First Instance did not grant the application for an expedited procedure.
14 On that same date, the Court of First Instance requested the applicant and the Commission to lodge written observations concerning the steps to be taken, as regards the present proceedings, in response to the judgment of the Court of Justice.
15 By letter of 18 July 2008, the applicant lodged its written observations at the Registry of the Court of First Instance. Those observations included a request for the proceedings to be stayed, at least until the applicant had lodged its written observations concerning the steps to be taken, as regards the proceedings in Case T‑464/04, in response to the judgment of the Court of Justice.
16 By letter of 23 July 2008, the Commission lodged its written observations at the Registry of the Court of First Instance. Those observations included a request that the proceedings be stayed pending the final ruling by the Court of First Instance in Case T‑464/04.
17 By order of the President of the First Chamber of the Court of First Instance of 11 September 2008, the proceedings in the present case were stayed in accordance with Article 77(c) of the Rules of Procedure, until Impala had lodged its statement of written observations, pursuant to Article 119(1)(a) of the Rules of Procedure, concerning the steps to be taken, as regards the proceedings in Case T‑464/04, in response to the judgment of the Court of Justice.
18 By order of 11 September 2008, the President of the First Chamber of the Court of First Instance granted Bertelsmann and Sony Corporation of America, following their applications to that effect, leave to intervene in the present case in support of the forms of order sought by the Commission.
19 By letter of 24 September 2008, Impala lodged its statement of written observations, as regards the proceedings in Case T‑464/04, at the Registry of the Court of First Instance, pursuant to Article 119(1)(a) of the Rules of Procedure. Those observations included an application for the proceedings to be stayed by reason of a new intervening event.
20 On 8 August 2008, the Commission received a notification of a proposed concentration by which Sony Corporation of America proposed to acquire control of the whole of Sony BMG by way of the purchase of shares representing the 50% interest of Bertelsmann in Sony BMG (Case COMP/M.5272 – Sony/Sony BMG) (OJ 2008 C 207, p. 14).
21 By decision of 15 September 2008, the Commission declared the concentration referred to in the preceding paragraph to be compatible with the common market (OJ 2008 C 259, p. 5) (‘the third decision’) and, accordingly, Sony BMG which had previously been a joint venture became a wholly-owned subsidiary of Sony Corporation of America.
22 By order of the President of the First Chamber of the Court of First Instance of 26 September 2008, the proceedings in the present case were stayed, in accordance with Article 77(d) of the Rules of Procedure until the delivery of the final ruling by the Court of First Instance in Case T-464/04.
23 The transaction which was the subject-matter of the third decision was implemented on 1 October 2008.
24 By order of 30 June 2009 of the Court of First Instance in Case T‑464/04 Impala v Commission, not published in the ECR (‘the order of 30 June 2009’), the Court held that there was no longer any need to adjudicate on the action in Case T‑464/04.
25 On 16 July 2009, the Court of First Instance asked the parties to submit their observations on the implications of the order of 30 June 2009 for the proceedings in the present case.
26 On 17 July 2009, the applicant lodged its observations, in which it claims that the Court should:
– declare that the action has become devoid of purpose in accordance with Article 113 of the Rules of Procedure;
– order each party to bear its own costs.
27 On 29 July 2009, the Commission lodged its observations. It contended that the action had become devoid of purpose, because the first decision remained valid.
28 On 6 August 2009, Bertelsmann lodged its observations, in which it contends that the Court should:
– declare that the proceedings have become devoid of purpose;
– order the applicant to pay the costs, including those incurred by the interveners.
29 On 7 August 2009, Sony Corporation of America lodged its observations, in which it contends that the Court should:
– declare that the proceedings have become devoid of purpose;
– order the applicant to pay the costs.
30 On 26 August 2009, the Commission lodged its observations on the applicant’s request for a ruling that there is no need to adjudicate, in which it contends that the Court should:
– declare that the proceedings have become devoid of purpose;
– order the applicant to pay the costs.
31 On 27 August 2009, Bertelsmann lodged its observations on the request for an order that there was no need to adjudicate presented by the applicant, in which it confirms that it does not oppose such an order and requests that the applicant be ordered to pay the costs, including those incurred by the interveners.
32 On 28 August 2009, Sony Corporation of America lodged its observations on the request for an order that there was no need to adjudicate presented by the applicant, in which it contends that the Court should:
– declare that the proceedings have become devoid of purpose;
– order the applicant to pay the costs.
Law
33 Article 113 of the Rules of Procedure provides that the Court may at any time, after hearing the parties, declare that the action has become devoid of purpose and that there is no need to adjudicate on it. It follows from Article 114(3) of the Rules of Procedure that, unless the Court otherwise decides, the remainder of the proceedings are to be oral.
34 In the present case, the Court considers that it has sufficient information from the documents before it and will therefore give its decision without taking any further steps in the proceedings.
35 It should be noted that, following the third decision, which declared the acquisition by Sony Corporation of America of Bertelsmann’s 50% holding in the capital of Sony BMG to be compatible with the common market, the applicant formed the view that Case T‑464/04 was no longer of any practical interest to it. By order of 30 June 2009, which declared that there was no need to adjudicate, the proceedings in Case T‑464/04 were definitively closed.
36 According to the applicant, its interest in the present case is the same as it was in Case T‑464/04, namely the annulment of a decision declaring the concentration between Bertelsmann and Sony Corporation of America to be compatible with the common market. As a consequence, for the same reasons as those in Case T‑464/04, it has no alternative, following the third decision, but to accept that the present case has become devoid of purpose.
37 According to the Commission, Bertelsmann and Sony Corporation of America, following the order of 30 June 2009, the first decision remains valid and the present proceedings have therefore become devoid of purpose.
38 In consequence, all the parties request the Court to declare that the present proceedings have become devoid of purpose.
39 Accordingly, it is not necessary to adjudicate on the present action.
Costs
40 The applicant requests that each party be ordered to bear its own costs, given that the present action has become devoid of purpose by reason of the transaction agreed upon between the parties to the concentration, which should not lead to the applicant being penalised in terms of costs.
41 The Commission, Bertelsmann and Sony Corporation of America contend that the applicant should be ordered to bear the costs.
42 Article 87(6) of the Rules of Procedure provides that the costs are to be at the discretion of the Court of First Instance where a case does not proceed to judgment.
43 In addition, the third subparagraph of Article 87(4) of the Rules of Procedure provides that the Court of First Instance may order an intervener to bear its own costs.
44 In the circumstances of the present case, on an equitable assessment of the matter, the applicant should be ordered to bear its own costs and those of the Commission, and Bertelsmann and Sony Corporation of America should bear their own costs.
On those grounds,
THE COURT OF FIRST INSTANCE (First Chamber)
hereby orders:
1. There is no longer any need to adjudicate on the present action.
2. Independent Music Publishers and Labels Association (Impala, association internationale) shall bear its own costs and those of the Commission of the European Communities.
3. Bertelsmann AG and Sony Corporation of America shall bear their own costs.
Luxembourg, 30 September 2009.