IMPALA leaders plan to meet with the European Commissioner in charge of
competition on Friday (Feb. 23), has learned. They intend to discuss a proposed framework to resolve objections that the independent music trade group has -- or may have in the future -- to major music company mergers and acquisitions, like the Sony BMG merger or a possible Warner Music Group acquisition of EMI.

Patrick Zelnik, president of IMPALA and president/CEO of Paris-based Naïve, tells that the group is scheduled to meet with Commissioner Neelie Kroes, who was appointed in September 2004 after the Sony BMG merger was initially approved. At the meeting, the group plans to present the deal that it struck with Warner Music Group, announced earlier today (Feb. 20). The deal sets out certain measures WMG agreed to take if the company acquires EMI; IMPALA would then support a WMG acquisition of EMI.

IMPALA leaders hope that the measures – or similar terms – can become a framework for music industry mergers and acquisitions to enhance competition
in the European Union, Zelnik says. He declined to provide specific terms of the WMG deal at this time.

Kroes is leading the Sony BMG reexamination after a European court annulled the merger. Many things have changed since the initial approval, Zelnik notes. Kroes is now in charge with a new team, they have a new approach to reviewing mergers, and there are new merger rules.

IMPALA still opposes the Sony BMG merger unless there are certain remedies to address the impact on the indie music market, Zelnik says. The group plans to discuss Sony BMG at the meeting this week.

"If cleared without remedies, we will go again for an appeal. We're quite firm on that," he says. Still, the group also plans to say, "It will be good not to lose too much time in court, but urgently work on market [solutions]. The best place to do this is privately."

IMPALA would like to privately work out terms similar to the WMG deal with Sony and Bertelsmann over the Sony BMG Music merger, and with Universal
Music Group and Bertelsmann over UMG's acquisition of BMG Music Publishing,
Zelnik says. "There are strong signs that they will [do so], but I might be wrong."

Bertelsmann declined to comment. Sony and UMG could not be immediately
reached for comment.

While Zelnik says he doesn't expect the Commission to simply accept the
proposal and applaud the WMG terms for other mergers, "there's quite a good
chance to create a momentum, to turn around the industry from a vicious
circle to a virtuous circle. This is just another way of looking at things
that are more constructive than legal battles."