The industry body representing independent labels in Europe - IMPALA - yesterday confirmed they were appealing the decision by the European Commission earlier this year to allow major record companies Sony and BMG to merge. With the two majors already in the process of combining their operations, IMPALA want the EC to reconsider their position, arguing that the final decision the Commission made went against their own research which warned of the dangers of further consolidation in the music industry.
In a statement issued yesterday IMPALA told reporters: "The European Commission recognises that independents are marginalised and have increasing difficulty in competing. Its decision to approve the merger goes against this and its responsibility to promote competition, consumer choice and diversity. When the market favours the strong multinational companies, anti-trust regulators need to address the market failures and also safeguard the potential of the emerging digital business for all players - large and small."
After confirming they had put aside the necessary funds to finance a legal fight against the merger, the statement continued: "The independents want to address the market imbalance and play their part in establishing a fair and competitive market place. They owe this to their consumers and music fans."
Michel Lambot, Co-chairman of the PIAS group and President of IMPALA, told CMU: "This is about protecting European as well as world-wide cultural diversity and self-determination in a world where globalisation means Hollywood. The news coming in today from the US elections affirms our decision that we need to make a stance against US domination of our cultural, political and economic interests. Although this is not the first time third parties have appealed a Commission decision approving a merger, it is a historic moment for the music business. It is the first time the industry has ever seen such a stance against concentration in the name of market access, fair play and diversity. What impresses me is the extent of feeling right across the sector that enough is enough."
Beggars boss Martin Mills - also an IMPALA board member - told us: "It has been said that cutbacks at the merged entity will be good for indies. Those benefits, if any, will be no different or greater than those accruing from similar actions by EMI and Warners, and will be a simple result of scalebacks by the majors. In practice what will impact on indies is an aggressive duopoly in the marketplace. We are seeing this already with the effects of Universal's power alone. We have no choice but to appeal."
It is unclear whether IMPALA really believe they can undo the SonyBMG merger given the commercial damage such a move would do to Sony and BMG given that consolidation has already begun. It may be that the move is more to ensure that major players and legislators in the music business are wary of any other consolidation in the future.