Apple, the European Commission and Europe's independent labels agree that a merger between Sony Music and BMG's Recorded Music divisions will be bad for music and for music shoppers.
Europe's independent music sector this morning spoke in support of the EC's strong objections to the merger proposal, which critics agree would give the merged music-giants an unfair market advantage.
Europe believes the move will "limit consumer choice and reinforce alleged anti-competitive behaviour among the main music companies", The Times reports.
The Commission says the merger will “significantly enhance a situation of collective dominance in which the majors try to align their pricing policies".
In February Apple "forcefully" objected to the proposals. It was concerned that digital-music distribution competitor Sony Connect would unfairly benefit from the merger, thus stifling competition.
The merger would give the combined firms 25 per cent of the world's music market, transforming them into the second biggest global music company. Major labels control 80 per cent of the global music market between them.
BMG and Sony claim the merger proposal is a response to declining music sales, an argument Europe's independent labels roundly rejected this morning in Brussels.
Monopoly merger means indie labels lose access
Patrick Zelnik, vice president of Independent-label body IMPALA – which represents 2,000 labels across Europe – said: "The parties have argued that the merger is justified because of market decline. The music market is full of opportunities and we need the Commission to guarantee access to those for the independents, in the interests of competition, innovation and consumers.”
IMPALA has asked EU antitrust commissioner Mario Monti to "ensure the independents have access to opportunities", particularly in terms of new digital music distribution services.
They fear that increased music industry consolidation will strengthen major labels' hold on such services and limit the level of opportunity available to independents, which currently have 22 per cent of the music market here.
They warned: "A merger would disproportionately aggravate collective dominance, making it significantly easier for large players to continue to abuse their market power by manipulating access to music at retail, media, and on the Internet, thereby raising the barriers to access for the other market participants."
In an argument against homogeny, they said: "Market imbalance would be increased by strengthening the emphasis on one-hit wonders and short-term entertainment at the expense of cultural diversity, consumer choice and the long-term development of catalogues and national repertoires."
Indies 'fundamentally object'
Europe has prevented a similar merger before. In 2000 a proposed link-up between Warner and EMI failed because Europe concluded it would be anti-competitive.
IMPALA president Michel Lambot said: "The objections here are so fundamental that it is difficult to imagine remedies that would be sufficiently far-reaching to deal with the EC’s concerns".
Sony and BMG are confident the merger will get the go-ahead, despite the strong objections. They told the EU that they are certain a hearing next Monday and Tuesday will answer its concerns.
The Commission will rule on this case by July 22, Reuters reports.