Needless to say, surely, much negative opinion in the independent music sector yesterday following that announcement that EC officials had given the go-ahead for major record companies Sony and BMG to merge without any limiting conditions.
Independent labels, retailers and management companies across Europe had opposed the merger proposals from the start, and had presented a range of evidence to officials claiming that the merger would give Sony BMG an unfair advantage in the music space, leading to an increase in CD prices and less consumer choice. However EC officials did not agree with the independent sector concluding there was no evidence the merger would be bad for the music industry at large.
Commenting on the EC ruling Michel Lambot, President of the pan-European independent music body IMPALA and Co-chairman of independent label PIAS, told reporters: "We have been told that the merger of two dinosaurs who reach a combined share of 50% of the market with head offices in New York will neither endanger the development of a European Culture nor the existence of thousands of young and small enterprises. This must be a b-movie. I will undoubtedly wake up tomorrow and realize just how bad and foolish my nightmare was."
Martin Mills, a member of IMPALA's board and boss of London based independent label Beggars added: "In an over-regulated world, the regulators have sadly chosen not to support creativity in music, meaning that the values of open market access for music from all sources have been subordinated to the economic desires of multi national corporations - precisely the kind of regulation that Europe's citizens actually need and want. This merger is not about economic necessity in a changing market, as BMG's stellar figures demonstrate, it is about the desire to dominate and to control the outlets at media and retail level through which news of wonderful new music is disseminated. Most concerning, of course, is the question whether having allowed the five music majors to become four, what would the Commission's attitude be if the majors go from four to three? This demonstrates why all sectors of the music industry other than the major record companies are fearful of the consequences of this merger, and are saddened by its approval."
American competition authorities are expected to give the go-ahead to the deal today because they have reportedly been undertaking their own investigations into the merger alongside the EC's. Word is the merger will then go into fast track with a final deal possibly signed within the month.