IMPALA Says It Expects EMI-Universal Deal to Be 'Blocked Outright'
IMPALA Says It Expects EMI-Universal Deal to Be 'Blocked Outright'

IMPALA, the Brussels-based Independent Music Companies Association, has called on the European Commission to intervene on its behalf should Universal or Sony attempt to buy EMI.

The news follows recent reports that Universal Music Group (UMG) has re-entered the fold to purchase EMI's recorded music operation. Sony Corp. is known to be one of two bidders for EMI Music Publishing.

IMPALA - which represents European independent music labels and has over 4,000 members, including [PIAS] Entertainment Group, Cooking Vinyl (U.K.), Edel (Germany), Kobalt (Sweden), Playground (Sweden) and the Beggars Group, representing XL Recordings, Rough Trade, Matador and 4AD - has said that it will oppose the sale of EMI to either company on the grounds that it would reinforce the Universal/Sony duopoly.

"Independent companies believe reinforcing the duopoly would be the worst possible outcome of the EMI negotiations - for music, those who make it and those who want to access it," said a statement issued by IMPALA.

The organisation has said that it requested the European Commission (EC) "to investigate all possible options to intervene" in EMI's potential sale to either major, the impact of which would affect "not only music but also the vital online and mobile market."

IMPALA, which challenged and held-up the European Commission's approval of the initial Sony and BMG Music merger in 2006 and more recently asked the EC to look into Universal's tie-up with Live Nation, goes on to warn that should Universal or Sony "construct a deal for EMI with a third party or with divestments, it would still increase their market power." Such a premise is likely to be met with resistance and possible court action from competition regulators, warns IMPALA.

"We have always said our position is no mergers without remedies and we know from 2007 that it is possible to find a solution which is far-reaching enough," says Helen Smith, Executive Chair, IMPALA.

"Our problem with Universal, however, is that we believe it is simply too big already to be allowed to gain more power and we have the same concerns over Sony buying EMI [Music] Publishing. Making such a duopoly more powerful goes completely against the basic principles of competition in cultural markets," Smith went on to say.

After BMG sold to Sony, IMPALA decided not to pursue a demerger; seemingly just wanting an empty paper ruling that would justify them saying they succesfully opposed it.

The independents association was more relaxed about the prospect of a Warner Music/EMI merger, believing that "it could help balance the [Universal/Sony] duopoly." If that eventuality does arise, however, "substantial remedies" will be required, warns IMPALA as any Warner/EMI merger would increase the competitive gap for independents.

In 2007, IMPALA struck a preliminary agreement with Warner Music, which saw the music major agree to implement a number of measures if it was then successful in acquiring EMI. Included among the 2007 measures was the provision of financial support to the independent sector. IMPALA is hopeful that the now Access Industry-owned Warner Music Group would once again demonstrate "its willingness to find far-reaching remedies" should its latest bid for EMI be successful.