Producers' group may take legal action over merger

BRUSSELS — Independent music producers have described as “fundamentally flawed” the European Commission’s decision to clear the merger between Sony and Bertelsmann’s music divisions. IMPALA, which represents over 2000 of the top European independents, said that the “easy clearance” of the Sony/BMG deal was made without any attempt to solve the competition issues that the Commission itself had identified, adding that it will consider its options in due course.

IMPALA has indicated previously that it would take legal action against such a clearance.

The Commission decision, which had been widely anticipated, gave the green light to the merger without imposing conditions on it. Independent music companies had argued consistently that the deal, which reduces the number of music “majors” from five to four, would make it easier for collusion to take place, to squeeze out the smaller labels. Initial objections had focused on the threat of increased prices for CDs, reduced consumer choice, and a stifling of the developing online music market.

According to IMPALA board member Martin Mills, “the regulators have sadly chosen not to support creativity in music, mean-ing that the values of open market access for music from all sources have been subordinated to the economic desires of multi national corporations.”

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