The European Union dealt heavy blows to two industry leaders this week.

On July 13 the Court of First Instance in Luxembourg, the second highest court in the EU, struck down the European Commission's decision to allow two music industry giants, Sony and Bertelsmann, to merge. In its decision, the court found that regulators did not adequately investigate whether the merger would result in a monopoly.

Independent record label company Impala, which represents 2,500 independent music companies, brought the challenge to the court after the Commission granted the two companies permission to merge in 2004, which led to the creation of Sony BMG. The ruling marks the first time a court has overturned a Commission decision to greenlight a deal.

Sony and Bertelsmann plan on resubmitting the deal to the court; however, if such a petition were to fail, the two companies may be forced to undo their partnership.

In other news, the European Commission levied a whopping $357 million fine against Microsoft July 12. The fine came after the Commission accused Microsoft of not complying with a 2004 antitrust order requiring the company to provide technical details of its Windows operating system to rivals.

Microsoft General Counsel Brad Smith has said that his company plans on appealing the penalty to the Court of First Instance, claiming that the Commission had not been clear on how Microsoft should comply with the original 2004 order.