IMPALA PROTESTS
BMG-SONY MERGER

European independent label trade group Impala laid out its objections to the proposed Sony-BMG merger at the MIDEM conference in Cannes, France yesterday, saying that it had lodged a formal complaint with the European Commission and would also add statements before Wednesday’s deadline for opposition statements.

Impala VP Patrick Zelnik raised to specter of legal action if the pact is given the go-ahead from the EC and U.S. regulators, saying, “Concentration is the main reason for the majors' difficulties and further concentration will make it even worse. The small players will be further marginalized and access to radio playlists, television programs and retail outlets will become impossible."

The trade group said it will fight the proposed joint venture combining the two companies’ music operations, repeating the same concerns it brought against the proposed EMI-Warner Music merger. Impala said that there would be several thousands of jobs lost if the merger went through.

Said Impala secretary general Philippe Kern, “Our main point is access. We want to avoid a situation where a combined entity makes it impossible for smaller independent labels and artists to get access to broadcasters and retailers.”

Beggar Group UK chairman Martin Mills also warned that a combined Sony-BMG would give two companies—Sony BMG and Universal Music Group—more than 50% of European marketshare. Europe accounts for almost a third of global music sales. Mills also said that the concentration would allow UMG and Sony BMG to fix prices and reduce market access, saying, “Product banality and low value are issues that will be exacerbated by more concentration.”

The EC is expected to announce on Feb. 12 if it will subject to the proposal to a phase-two investigation, which would take several months. Both Sony and BMG are said to be expecting the lengthy inquiry, but the slump in the industry gives it a better chance than the EMI-Warner proposal had. Impala is expected to demand significant concessions and structural changes if the deal is approved.