Thumbs-Up Comes with Conditions.

The European Union’s executive body conditionally approved America Online’s $129 billion acquisition of Time Warner yesterday, removing a major obstacle in the proposed combination between the world’s largest Internet and media companies. Under terms of the approval, AOL and Time Warner agreed that they will not muscle out rivals from the emerging media and entertainment markets, the European Commission said in a statement. EU authorities made quick progress on the issue after Time Warner last week dropped a separate joint venture plan with EMI Group of Britain, which would have created a major music company. European regulators had strongly opposed that deal. The executive agency of the 15-nation European Union said that AOL, the world’s top Internet service provide with more than 24 million members worldwide, is to sever its structural links with German media giant Bertelsmann AG. The companies jointly own AOL Europe. That move will prevent online giant AOL “from having access to Europe’s leading source of music publishing rights, thereby eliminating the risk of dominance in the emerging markets for online delivery of music over the Internet and software-based music players,” it said. The companies also have provided guarantees that they will not unfairly discriminate against other companies that provide Internet content or within the music industry. With the guarantees, the 20-member European Commission voted to approve the deal at its weekly meeting, two weeks ahead of its Oct. 24 deadline.