So, back to this old chestnut, and amid rumours that Sony Corp is about to make a $1.5 billion bid to buy Bertelsmann out of their SonyBMG joint venture, the pan-European indie label trade body IMPALA returned to the European courts late last week to again appeal the decision by the European Commission to let Sony and Bertelsmann merge their record companies in the first place.
As much previously reported, IMPALA surprised many, and maybe even themselves, when, in 2006, they successfully appealed, through the European Courts Of Justice, the original 2004 decision made by the Commission's competition authority which allowed the merger of Sony Music and BMG. The ECJ agreed with the indie label trade body that the Commission's competition people had not sufficiently investigated the impact the further consolidation of the major labels would have on the wider record and music industry.
The ECJ themselves don't have the authority to undo the merger, merely to set aside the Commission's ruling on procedural grounds. Having done just that, the Commission's competition team re-reviewed the Sony BMG merger proposition anew - even though the merged SonyBMG had, by this time, been in existence for two years. Having undertaken what they called a more thorough investigation, the Commission announced last Autumn that they were again going to give the merger the green light.
Now, nearly four years on from the merger, IMPALA have returned to the ECJ to appeal that second Commission ruling on the matter, arguing that those damn competition officials only went and bungled the second investigation too. The trade body's main point isn't so much that the merger shouldn't have been given the go ahead at all, but that it should have been conditional - with the major being forced to provide 'remedies' to the wider record industry.
Concentrating on the need for remedies is pragmatic on the part of IMPALA. Realistically, four years on, even if European officials decided that, after all, the 2004 merger should never have happened, it would be hard to return SonyBMG back to its constituent parts of Sony Music and BMG, especially if Bertelsmann is no longer even a partner in the business by the time that ruling is made. However, it would be practical to force the major to provide remedies to the independent sector, especially if those were financial rather than involving large scale sell offs of parts of its label operations or catalogue.
As previously reported, when there were plans afoot for Warner and EMI to merge early last year IMPALA reached an agreement with Warner chief Edgar Bronfmann Jr which would have seen the major provide undefined remedies to the indie sector to win their approval of the merger. Of course, said merger, and said remedies, never materialised after Guy Hands' Terra Firma bought EMI - though not before the Warner/IMPALA deal had caused some controversy in the indie community, with some key indies, most prominently Ministry Of Sound, disagreeing with the deal.
I've no idea what the timescale is for the ECJ to consider IMPALA's latest appeal. But I do know what IMPALA co-President and !K7 Records chief Horst Weidenmueller thinks. He told CMU yesterday: "A merger such as this with no remedies has repercussions for thousands of artists and small businesses across Europe. IMPALA's primary issue is the dysfunctioning of the music market. Online is the key example here and the EC should look more closely at how the majors are controlling the roll-out of this market".
IMPALA Executive Chair Helen Smith added: "There is a huge contradiction here. Politically the EC is light years ahead of where it was when it first authorised the SonyBMG merger. But, we still seem to be some way off relying on the regulators to guarantee an open and competitive market, so we had no choice but to appeal. At the same time we welcome the new political agenda at EC level and are ready to work on concrete market access measures to empower thousands of SME music operators and their artists, as set out in IMPALA's Action Plan adopted in March".