European independent labels association Impala today welcomed the European Commission's initial objections to the planned merger between Sony and BMG. In a statement, the Brussels-based trade group sa
European independent labels association Impala today welcomed the European Commission's initial objections to the planned merger between Sony and BMG. In a statement, the Brussels-based trade group says that the Commission's Statement of Objections (SO), released last month, echoed the concerns of indies on the collective dominance of the five majors on the music market, a situation it warns would worsen if Sony and BMG merged.
"The [SO] reflects a lot of opposition to the merger," Impala president Michel Lambot told a media gathering in the Belgian capital. "We are living in a world where collective dominance is a reality." Lambot, who is also co-chairman of Brussels-based independent label group PIAS, suggests Sony and BMG made misleading claims when they said consolidation was the only way to face piracy and declining sales. "Why do they need to merge to cut costs? This merger is not about saving costs: it is about control and pricing," Lambot adds. "The problem for Sony-BMG is not piracy, it's power."
Lambot led an Impala delegation that met EU competition commissioners yesterday and will take part in the Commission's closed-doors hearing on the merger, which takes place in Brussels Monday and Tuesday (June 14-15).
Horst Weidenmüller, CEO of Berlin-based dance music label !K7, says that the SO confirmed the price collusion - or "parallism" - between the majors that was first raised when TimeWarner and EMI tried to merge in 2000. "The Commission brought it into light in a way that was surprising and shocking," he notes. "It is already very difficult to introduce new artists into the market place. As a result creativity is stifled, leading to market decline. Concentration is the real cause of the market problems - further concentration will make things worse for artists and diversity."
Impala VP Patrick Zelnik - also head of French indie Naïve records - noted that a dominant position was not in itself illegal. "But I have never seen anyone in a dominant position and not abuse it," he says. "If we want a healthy market, we have to have a well-balanced market between independents and majors."