IMPALA, the pan-European body for independent music, was in the European Courts yesterday to dispute the EU decision to allow Sony and BMG to merge their music operations.
As previously reported at possibly tedious length, the EU gave the go ahead for the two major record companies to merge in July 2004. European officials initially expressed concerns about the proposed merger, but then gave the green light without conditions. That decision, IMPALA argues, was damaging to the wider music industry, and failed to consider all the unfair competition implications of the move.
While the EU argues that initial concerns that another merger in the music business would lead to higher CD prices and fewer customer choices were proven to be unfounded, IMPALA say that in approving the merger officials failed to appreciate the impact the merger would have on online markets or the problems faced by a music industry already dominated by a handful of major players. The trade body says it wanted and expected the EU to "do its job as the guardian of real competition, consumer value and choice and cultural diversity and more importantly citizenship rights and obligations".
Alison Wenham, boss of the UK Association Of Independent Music and a Vice-President of IMPALA, told reporters yesterday: "Creatively the independents have the edge. They know they can compete if they have the same chance as the big companies. The problem lies where the playing field is not level due to severe market access problems created by over-concentration in a cultural industry."
The European Courts are expected to take three to six months to decide whether or not the EU were right or wrong in okaying the merger. As we've said before, there is little anyone could do now to demerge Sony and BMG, but if the ruling goes against EU officials it may well stop them from being so keen to allow future mergers in the music sector (in particular the long anticipated EMI Warner merger).