IMPALA Raises Concerns On The Proposed Sale Of BMG Music Publishing To Vivendi Universal
IMPALA is concerned that the proposed sale by Bertlesmann of BMG Music Publishing to Vivendi Universal would further damage competition in recorded music, strengthen existing collective dominance in publishing, and prejudice collecting societies and the online licensing and synchronisation markets.
The independent music companies takes the view that regulatory approval will not be obtained. Already in 2000, in the attempted EMI Warner merger of publishing as well as recording, the EU concluded that further concentration in the music publishing market could not be tolerated. The Commission expressly stipulated then that the merger of two major publishing groups would significantly strengthen an existing collective dominant position in the music publishing market.
The independents believe that the European Commission will have little choice but to reach the same conclusion with BMG and Universal in 2006, where the market is even already more concentrated than in 2000. They also point out that new merger rules will make regulatory approval more diffilult to obtain. The fact that Universal is a smaller major publisher will not change the Commission's assessment.
The merger will aggravate competition in the music sector even more, particularly given the strength of Universal in recording as well as publishing. IMPALA also points out that the Commission will be bound by the European Court of Justice's decision in July when it annulled the Commission's 2004 approval of the Sony BMG recorded music merger. The independents point out that Sony and Bertlesmann agreed that concentration in music publishing was not acceptable and expressly excluded it from the SonyBMG deal. This move by Bertlesmann could be seen to breach its commitments to the Commission.
Patrick Zelnik (IMPALA president and president CEO of Naïve): "This merger would have serious repercussions for competition in the publishing and recording music. The Commission has already reached a verdict - in 2000. This move contradicts Universal's own position in 2000 when it opposed the attempted EMI Warner, precisely because of the impact of further concentration in music publishing."
Martin Mills (IMPALA chairman and chairman of Beggars Group): "The strength of Universal in recording music would make this merger bad news for artists and music. It will also be particularly difficult for the regulators. The Commission will need to make sure it properly implements the judgement of the European Court in our appeal against SonyBMG. Our appeal was about concentration right across the board in music."
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