IMPALA Press Release – Brussels, 7th November 2007

IMPALA calls for first SonyBMG merger annulment to be upheld as parties’ legal interest questioned

Independent music companies from across Europe were in court again yesterday over the Sony/BMG merger.  The European Court of Justice heard the appeal made by Sony and Bertelsmann against the Court of First Instance’s annulment in 2006 of the Sony/BMG merger.  This merger was recently re-approved by the European Commission without remedies despite further investigations.

IMPALA made the case that the parties’ appeal is in any event unfounded and unjustifiable. The parties are trying to reopen the facts which the court rules do not allow.  An appeal can only be made on points of law.  IMPALA is also concerned that the effect of the parties appeal would be to rewrite merger control and lower standards to benefit merging parties.

The EC’s second approval of the merger places a question mark over the legal interest of Sony and Bertelsmann in continuing their appeal. This is because the second EC approval issued in October gives the parties what they sought and therefore renders the litigation without purpose. The judges also raised the issue of legal interest at the hearing.

The case was heard by the Grand Chamber (full court with twelve judges), underscoring the importance of the issues at stake. The Advocate General, Juliane Kokott, is expected to deliver an opinion on 13 December.

Quotes

Martin Mills, IMPALA Chairman and Chair of Beggars Group said: “The initial decision by the Court set a number of precedents and was a huge encouragement to the independent community that their arguments were being heard and accepted at the highest level. We believe it should be upheld in the interests of Europe’s consumers, music fans, and entrepreneurs.”

Patrick Zelnik, IMPALA President and President of Naïve added: “We have asked the Commission to undertake a fundamental rethink on its approach to concentration in the music market. Market recovery is possible if the whole sector works together with the Commission, as IMPALA has already proposed.”

Backround to the Sony/BMG merger

About IMPALA  

IMPALA was established in April 2000 to help independent record companies and music publishers to consider the issues of interest to independent music companies and to promote the expansion and competitiveness of independent music in the interest of cultural diversity.

99% of music companies are SMEs. The independents are world leaders in terms of R&D and discovering new music and artists. Despite this, they face increasingly complex barriers to trade and severe market access problems. Over 80% of the market and 95% of key radio and retail is concentrated in the hands of the majors. The independents’ collective market share fluctuates considerably from territory to territory in Europe. The gap between the majors and the independents is now so wide that not one independent has more than 1.5% across Europe.

IMPALA has over 3500 members including the top independents: !K7 (Germany), Beggars Group (UK), Bonnier Amigo (Sweden), CLS Music (Hungary), CNR (NL), Cooking Vinyl (UK), Edel (Germany), Epitaph (US/NL), Gazell (Sweden), Menart doo (SIovenia), Musicvertrieb (Switzerland), Naïve (France), Odyssey (Ukraine), PIAS Group (Belgium), Playground (Sweden), Red Bullet (NL), Soyuz Music (Russia), SPV (Germany), Wagram (France), as well as national trade associations from the UK (AIM), France (UPFI), Germany (VUT), Spain (UFI), Italy (PMI), Belgium (BIMA), Denmark (DUP), Norway (FONO), Israel (PIL) and Sweden (SOM) and the Catalonian association APECAT.

 

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