IMPALA Press Release – Brussels, 13th December 2007

IMPALA welcomes opinion that EC Court was right to annul Sony/BMG merger in 2006

Independent music companies from across Europe welcomed today the opinion of the European Court of Justice (ECJ) that its lower Court was right to annul the SonyBMG merger in 2006. The Court’s Advocate General, Juliane Kokott, has concluded that the appeal of Sony and Bertelsmann should be rejected in its entirety. It was also confirmed that there is NO presumption in favour of merging parties that mergers are pro-competitive.

The independent music community welcomes this opinion as a vindication of their previous efforts to secure proper merger control in the music sector, which suffers from chronic concentration. IMPALA had highlighted to the court that Sony and Bertelsmann were attempting to rewrite merger control and lower standards to benefit merging parties. This was clearly rejected by the Advocate General who also recommended that Sony and Bertelsmann pay three quarters of IMPALA’s costs. IMPALA expects the European Court to follow the Advocate General’s opinion and give it’s final decision early next year.

Patrick Zelnik, President of IMPALA and Naïve said: “This is very encouraging.  I trust the Court will follow the advice of the Advocate General and find in favour of thousands of small and medium sized record companies and artists across Europe.”

Martin Mills, Chairman of Beggars group and IMPALA added:  “The original SonyBMG merger approval was annulled with good reason. It was a landmark result for the independent community, notwithstanding events since, and for the main Court to recommend that the original judgement should be upheld on its merits is a further vindication of our position on the mergers issue.”

Helen Smith, Secretary General of IMPALA added: “The confirmation that there is no presumption in favour of mergers is vital, particularly in concentrated cultural markets such as music.”

Background
Following IMPALA’s appeal, the Court of First Instance in 2006 annulled the Commission’s 2004 approval of the SonyBMG merger. The Commission then re-examined the case. It cleared the merger without remedies in October, and IMPALA awaits the full decision. In parallel to the Commission’s re-investigation, Sony and Bertelsmann appealed against the Court of First Instance’s judgement.  The appeal was heard in November, before the full chamber of twelve judges, underscoring the importance of the case. IMPALA argued that the parties’ appeal was unfounded and unjustifiable, and also pointed out that the parties were trying to set a presumption that mergers are good for the market. Today’s opinion finds in favour of IMPALA.  For more on the case and also on the second approval decision, please see background note.

Backround to the Sony/BMG merger

About IMPALA  

IMPALA was established in April 2000 to help independent music companies represent their own agenda and promote the expansion and competitiveness of independent music in the interests of entrepreneurial and cultural diversity. IMPALA is the only cultural and creative SME association in Brussels.  

99% of Europe’s music companies are SMEs. Known as the “independents”, they are world leaders in terms of innovation and discovering new music and artists - they produce more than 80% of all new releases. They are also key employers, providing more than half the jobs in the whole sector. Their potential is enormous but is hampered by complex barriers to trade and severe market access problems. The impact on diversity, consumer choice and pluralism is clear. Over 95% of what most people hear and see, whether on radio, retail or the internet, is concentrated in the hands of four multinationals, known as the majors”. The Commission will now seek to put new policies in place to give SMEs preferential treatment, which is seen as is “economically and politically justifiable”.  Cultural and creative SMEs are now officially recognised by the EU as “the drivers of growth, job creation and innovation”.  

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.

For further queries, please see http://www.impalamusic.org or contact IMPALA on T: + 32 2 503 31 38, IMPALA, Coudenberg 70, B-1000, Brussels.

 

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