IMPALA appeals EC authorisation of SonyBMG merger without remedies for a second time
A new appeal was lodged on Friday at the EC's Court of First Instance in Luxembourg, challenging the EC’s unconditional authorisation of the SonyBMG merger for a second time. IMPALA believes the Commission repeated many of the errors that it made before, despite the court’s judgement in IMPALA's favour in 2006. As the music sector is highly concentrated, IMPALA's position is that music mergers should not be allowed unless far reaching remedies are put in place to protect market access and promote market recovery.
The independents will also encourage the EC to adopt a series of market access measures as set out in IMPALA's Action Plan adopted in March. This will include new competition rules which recognise the specificities of culture and the crucial role of economic diversity in music - it is the independents who produce over 80% of all music released in Europe today, creating over half the jobs. This is essential for the EC to deliver its Lisbon agenda, which now includes unlocking the economic potential of culture and SMEs as a top priority because they are recognised as “drivers of growth, job creation and innovation”.
IMPALA has also cited the overall development of the online market and the particular market access and compensation issues for independents arising out of the majors’ deals with operators such as Kazaa and MySpace. The independents need to overcome market dysfunction and ensure that they are not locked out. However there is a long way to go, and it is clear that there are serious barriers to entry for smaller companies in both the offline or online markets. Effective market access and remuneration of the independents’ copyrights is vital for music fans and artists alike.
Horst Weidenmueller, CEO of !K7 Records and Co-President of IMPALA said: “A merger such as this with no remedies has repercussions for thousands of artists and small businesses across Europe. IMPALA’s primary issue is the dysfunctioning of the music market. Online is the key example here and the EC should look more closely at how the majors are controlling the roll-out of this market.”
Michel Lambot, President of PIAS Group and Co-President of IMPALA added: “We had two options. Like in Ireland say Yes or say No. We have said No since 2000, No to an unregulated market that dies, No to the absence of remedies, No to the danger posed to the diversity of culture, No to the absence of entry points for new entrepreneurs in the cultural sector and we said YES to Lisbon's agreement, Yes to the ratification of the Unesco treaty Yes to the existence of a buoyant independent sector, Yes again to a vital, dynamic and diverse European musical world... Had we another choice than opposing the merger of two majors without market remedies?”
Patrick Zelnik, President of Naïve and Co-President of IMPALA commented: “Music has a great future if smaller labels obtain the regulatory support they need to keep creating new, innovative music. Decisions like this make it even more difficult. The EC has simply repeated the economic, political and cultural errors it made before. These need to be corrected. The implications for cultural diversity are clear for us all to see. It is time for the regulators to work together with the majors and the independents on far-reaching remedies, in the interests of market recovery.”
Helen Smith, Executive Chair of IMPALA added: “There is a huge contradiction here. Politically the EC is light years ahead of where it was when it first authorised the SonyBMG merger. But, we still seem to be some way off relying on the regulators to guarantee an open and competitive market, so we had no choice but to appeal. At the same time we welcome the new political agenda at EC level and are ready to work on concrete market access measures to empower thousands of SME music operators and their artists, as set out in IMPALA's Action Plan adopted in March.”
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