Monday 20th February 2012
With Universal finally notifying its EMI deal in Europe two months after filing in the USA and three months after the sale was announced, independent music companies welcome the start of the official regulatory process.
Helen Smith, IMPALA Executive Chair commented: "The clock has finally started ticking in Europe. Ultimately we expect this to lead to an outright rejection of both Uni/EMI and Sony/EMI mergers. Keeping the online market as open as possible is essential for competition and for responding to piracy, as well as other market problems. Turning music into a two-horse race would hamper the natural development of the market and increase prices. No level of divestments or behavioural undertakings would prevent that from happening."
IMPALA will now supplement the evidence already provided to the regulators in early January. IMPALA points out that Europe has already effectively set a maximum size for music companies, which both Universal and Sony exceeded before they started bidding for EMI. Piracy and the importance of the online market, as well as other current market conditions, require an even stricter regulatory line on consolidation today than ever before. Leniency would simply result in market distortions such as increased prices, reduced output, market access restrictions, lower cultural diversity and reduced consumer choice.
The European Commission now has to decide whether it should launch a detailed investigation. IMPALA has already received a questionnaire and will reply in due course. The same is expected on Sony/EMI. IMPALA confirms it will continue to co-operate fully with the regulators on both sides of the Atlantic, to make it clear why the deals would be the worst possible outcome for competition, artists and consumers, as well as for the development of a thriving and diverse online market.
IMPALA was established in April 2000 to represent independent music companies. 99% of Europe’s music companies are SMEs. Known as the “independents”, they are world leaders in terms of innovation and discovering new music and artists - they produce more than 80% of all new releases. SME’s also produce 80% of Europe’s jobs. Their potential is enormous but is hampered by complex barriers to trade and severe market access problems. The impact on diversity, consumer choice and pluralism is clear. Over 95% of what most people hear and see, whether on radio, retail or the internet, is concentrated in the hands of four multinationals, known as the majors.
Cultural and creative SMEs are now officially recognised by the EU as “the drivers of growth, job creation and innovation”. IMPALA expects the EC and its member countries to put in place key investment, digital and market access measures. Fostering Europe's economy of culture and diversity is one of the EU's top priorities in becoming the world's leading knowledge economy. Culture is a bigger earner than any of chemicals, automobiles or ICT manufacturing and provides more than 3% of Europe's jobs. IMPALA has its own award schemes to help promote cultural diversity and new talent and highlight the artistic contribution of independent music. IMPALA award winning artists include Efterklang, Adele, Manu Chao, Radiohead, Agnes Obel, Caro Emerald and Sigur Ros.