Impala Urges Merger Block

Despite some disagreements within its own ranks, the European independent music companies’ association has urged the European Commission to “take a stance” and block the Universal-EMI merger.

In a letter to the EC Sept. 17, IMPALA has asked the EC to “stay faithful” to the Statement of Objections it issued in June, which concluded that the merger was a real danger “in nearly all member states.” 

 
Since then the issue has become muddied as several major independent record labels have appeared to swing behind the deal, particularly those who may have a vested interest in picking up whatever pieces of the newly merged company the EC will force Universal to offload.
 
Universal has already prepped for these sales by hiring Goldman Sachs and Bank of America as advisers, while the indie sector has been alerted because Parlophone, Virgin, Chrysalis and the European rights to Mute and Ensign could soon be on the block.
 
Patrick Zelnik, head of French label Naïve, an Impala board member and formerly a vocal opponent of major mergers, is said to be talking with Richard Branson to buy back Virgin, which was gobbled up by EMI in 1992.
 
The apparent split in the indie ranks has also been exacerbated by reports that Ministry Of Sound chief James Palumbo is eyeing the scraps, while Daniel Miller is said to be interested in buying back Mute Records.
Miller sold Mute, which has Depeche Mode, Moby and Nick Cave, to EMI in 2002.
 
Impala appears to be shrugging off the problem and has underlined that allowing the biggest music company in the world to become even more powerful was inconsistent with the EC’s stated concerns about the digital market and how copyright is misused, as well as its ambitions for unlocking the potential of cultural and creative industries through their “smaller actors.”
 
Impala executive chairperson Helen Smith reckons that “blocking Universal’s attempt to increase its market power by buying one of its most thriving competitors” is the logical outcome. 
 
“It is difficult to see how remedies could be compatible with the EC’s Statement of Objections, which predicted that the merger would cause foreclosure of competitors’ access to media, as well as price increases and other problems,” she said.
 
“If Europe wants to promote competition and diversity, and ensure customers and consumers are protected from copyright abuse, now is the time to take a stance.”
 
The letter sent to the EC appears to be Impala’s last throw of the dice as the European regulatory authority, which is believed to be swinging behind the Universal takeover of EMI, is expected to announce its decision on it by the end of the month.
 
Impala has raised its concerns with the European Commission and other regulators since the sale of EMI was announced last year, when IMPALA also called for a political debate on whether the music market should be allowed to become a “two-horse race.”