IMPALA Welcomes Second Stage Investigation In EC Re-Examination Of SonyBMG Merger
Confirming the view of thousands of independent record labels across Europe that the SonyBMG merger raises serious competition concerns, the EC has concluded that it needs further investigation. The EC now has four months to carry out a detailed assessment.
The Commission is reviewing the merger for the second time. It will be bound by the European Court's decision in July last year in IMPALA's favour, when it annulled the Commission's original approval of SonyBMG in 2004. The independent music companies will play a vital role in helping the Commission «market test» its data and conclusions.
This was identified by the court as a problem in the Commission's analysis first time round. The Court found that the Commission had done a U-turn and wrongfully approved the merger, without remedies, despite overwhelming evidence that competition would be severely damaged.
IMPALA has been pushing for a wider investigation as, last time around, the focus was mainly on price. IMPALA's members have raised specific concerns about their reduced market access. These include the collective dominance of the majors and co-ordination of competitive behaviour in retail, radio and television, press and other media, as well as in the vital on-line market.
The independents also asked the Commission to address other vital issues such as cultural diversity, the role of creativity and small business in the Lisbon strategy, vertical integration, links with sister publishing companies, unfair leveraging of repertoire and review of SonyBMG promises during the first investigation, as well as what has happened since.
IMPALA's agreement with Warner acknowledges that mergers without far-reaching remedies cannot be authorized. IMPALA expects the Commission to roll that out as a template for SonyBMG to serve as a model for the independents and all majors to work together towards market recovery.
Patrick Zelnik (IMPALA president and president/CEO of Naďve, France): "The Commission will now be able to carry out the full cultural impact assessment it is obliged to do under the Treaty. We will also be urging the Commission to take into account the recent acknowledgement by Warner that concentration in music causes serious problems and needs serious solutions."
Martin Mills (IMPALA chairman and president of Beggars Group, UK): "IMPALA's position remains consistent, mergers without appropriate remedies are unacceptable and always have been. One major accepts that we are right and we will continue to do everything possible to persuade the Commission to take the same view."
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