Brussels, December 18th 2008

European Parliament challenges the Commission again about competition in the music market and the SonyBMG merger, as independents’ appeal continues without new action over Sony buy out

The European Parliament has challenged the European Commission for the third time over SonyBMG. The EC Commissioner for Competition, Neelie Kroes has six weeks to provide a written explanation regarding:

1. Why the Commission did not carry out an in-depth investigation when it adopted its last approval decision?
2. What the Commission's strategy is for making sure that SMEs have market access in concentrated sectors like music?
3. Whether the Commission will adopt new rules or guidelines on how competition policy should be adapted to the specificities of cultural markets such as music?

In the meantime IMPALA will continue its initial appeal regarding SonyBMG. In September the European Commission approved the buy out by Sony of Bertelsmann's shares in the joint venture SonyBMG and IMPALA objected because no remedies were put in place and there was no detailed investigation. As IMPALA is still in litigation over the creation of SonyBMG in the first place, however, it will not launch a new appeal over the buy out. IMPALA's concerns mainly relate to the market power of SonyBMG (and the other majors) rather than who owns it. IMPALA's appeal in the European courts will be heard again by the judges next year. IMPALA also appealed the EC's second approval decision and this case is on hold while the appeal against the first approval is being dealt with.

IMPALA's efforts continue on both political and commercial levels, as well as judicial. This is important because what IMPALA has been saying about the consequences of excessive concentration has indeed come true. The combined market share of Universal and Sony for chart albums in key territories such as the UK is over 80%. In addition, since the approval of the merger Sony have already publicly spoken of improving vertical integration with the rest of the company.

We will continue to seek a level playing field for the independents through collective Merlin action. We will also continue to ask the Commission to reform competition rules, and investigate the structure of the music market and the impact that this is having on the development of the critical online market.