Pan-European independent record label trade body IMPALA told reporters on Friday that they expect Sony Corp and Bertelsmann's appeal to the European Courts regarding the SonyBMG merger to be turned down.
Their statement followed the submission of SonyBMG's appeal last week. As previously reported, the major record company is appealing the ruling made by the European Court Of First Instance earlier this year which said that the European Commission was wrong to approve the merger of Sony and Bertelsmann's record label operations back in 2004. That ruling means that the Commission is now having to reconsider Sony and BMG's merger proposals a new and, if they were to reach a different conclusion this time round, in theory SonyBMG could be forced to split back into two companies. On submitting their appeal, a spokesman for Bertelsmann said last week: "The EU Commission's 2004 decision to clear the Sony BMG recorded music joint venture was correctly decided on both the law and the facts".
But IMPALA, whose legal action against the merger led to the Court Of First Instance's ruling of course, said that while they were still to review SonyBMG's appeal in full, they thought there was a high chance it would not even be considered by the courts, let alone succeed. They said in a statement: "We would be very surprised if the Court were to allow this appeal at all. An appeal is only possible on grounds of law. The judgment was based entirely on grounds of fact - material errors of assessment and reasoning by the Commission. We would expect it to be struck out on grounds of inadmissibility".
Observing that the Commission itself was not, as it could, appealing the ruling, something which IMPALA says "speaks volumes", the trade association concluded: "In any event, our judgement still stands and SonyBMG remains an unauthorised merger which needs Commission approval. The parties and the Commission are obliged to act with due urgency to prevent further damage on the marketplace. The Court identified serious market problems and material errors of assessment that the parties have no choice but to try and solve if they want to avoid a de-merger. This appeal shows that the parties are indeed concerned by the prospect of what lies in store".