Indies Back On Sony-BMG Warpath

The independent music companies are back on the Sony-BMG warpath after the European Parliament challenged the European Commission’s decision on the merger for a third time.

EC Competition Commissioner Neelie Kroes now has a month to provide a written explanation why it approved the deal without carrying out an in-depth investigation.

Kroes also needs to explain the commission’s strategy for making sure that small- and medium-sized enterprises (SMEs), which include the independent music companies, will have market access in concentrated sectors like music.

The parliament also wants to know if the commission will adopt new rules or guidelines on how competition policy should be adapted to cultural markets such as music.

The parliament and the commission have been batting the issue around for nearly five years, while Sony and BMG merged and then split. But IMPALA – the independent music companies’ organisation – says it’s more bothered about the size and the power of the company than who owns it.

“IMPALA is still in litigation over the creation of Sony-BMG in the first place,” the organization said in a December press release, explaining that it will not launch a separate appeal over Sony buying out BMG’s share.

The indie organisation’s first appeal against the EC’s approval of the original Sony and BMG merger will be back in the European courts this year.

IMPALA also appealed the fact the EC approved the merger for a second time, after the European courts told it to reconsider its original decision.

That appeal is on hold while the appeal against the first approval is being dealt with, which means the European court and commission are spared the problem of playing ping-pong with two balls at once.

It’s hard to see what the endgame will be, given that the issue has become more complicated with every passing year and now seems nearly impossible to unravel.

IMPALA will at least want some reassurances that the European Commission will start practicing the support for SMEs that it’s preaching and put in safeguards to ensure the market is more of a level playing field.

Cultural and creative SMEs are now officially recognised by the EU as “the drivers of growth, job creation and innovation.”
The indies may also want to see what was formerly Sony-BMG – now totally owned by the Japanese electronics giant – being forced to sell off some of its assets.

Even if Sony didn’t think it was worth appealing such a ruling, it’s unlikely to be happy about having to sell off peripheries in the current economic climate.