So, the European Court Of First Instance was right to say that the European Commission should never have given the go ahead to the merger of Sony Music and BMG back in 2004. And don't you go saying otherwise, OK? Cos if you do, I'm going to set that Juliane Kokott on you, and you don't want that. Who knows what power European court officials now have given the EU Treaty Gordon signed last night.
Anyway, Kokott, who is Advocate General of the European Court Of Justice, yesterday said that the appeal launched by Sony Corp and Bertelsmann in relation to the Court Of First Instance's decision last year should be dismissed. As much previously reported, after European competition officials gave the two entertainment congloms permission to merge their recorded music businesses - creating SonyBMG - the pan-European indie label trade body IMPALA went to the European courts to have the decisions overturned.
And they succeeded. Last year the European courts ruled that European Commission officials should not have given the merger the green light based on the amount of investigation they had done at that time regarding the impact a combined SonyBMG would have on the wider music industry. Sony and BMG appealed that court decision, and their appeal has been the subject of various court hearings recently. Kokott has reviewed those hearings and yesterday said the appeal should be dismissed, and that Sony and BMG should cover their own legal costs, and 75% of IMPALA's legal costs, in relation to the appeal. Those proposals will now be considered by judges in the European Court.
Apart from the distribution of burden relating to legal fees, Kokott's conclusion will not have any real immediate effect on SonyBMG because, as also previously reported, the European Commission undertook a second more indepth review of the SonyBMG merger proposals after last year's court ruling (even though the merged SonyBMG had been in existence for over two years by that time) and reached the same conclusion - that the merger was sound.
That said, IMPALA welcomed Kokott's conclusions, saying it set an important precedent - that there should not be any presumption in favour of major mergers when they are presented to European competition regulators.
IMPALA President Patrick Zelnik told CMU: "This is very encouraging. I trust the Court will follow the advice of the Advocate General and find in favour of thousands of small and medium sized record companies and artists across Europe".
IMPALA chair Martin Mills added: "The original SonyBMG merger approval was annulled with good reason. It was a landmark result for the independent community, notwithstanding events since, and for the main Court to recommend that the original judgement should be upheld on its merits is a further vindication of our position on the mergers issue".