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Last Updated: Wednesday, 3 November, 2004, 14:42 GMT
Indies challenge Sony BMG merger
Sony artist Beyonce
Beyonce now comes under the Sony BMG label
Independent music companies are launching a legal challenge to the European Union's decision to allow the merger of Sony and Bertelsmann (BMG).

Impala, the body representing 2,500 indie labels, is appealing to prevent what is calls a "market imbalance".

Permission for them to merge meant that 80% of the world's music is owned by just four records companies.

The EU gave its backing to the merger in July, and the US federal Trade Commission also did not oppose it.

But Impala believes the EU was wrong to allow the merger go unchallenged, saying it went against the principles of a competitive marketplace.

"We have taken this unprecedented step for what we believe to be the long term health of the entire music industry and all its stakeholders," said Alison Wenham, vice president of Impala.

Cultural diversity

"The threat of a duopoly operating in the business without any real constraints is too great for any serous company or sector to ignore.

"The independents deserved better from the EU, and it is our intention to ensure that the facts of our case are properly respected," she added.

Impala's president Michel Lambot said: "This is about protecting European as well as worldwide cultural diversity and self-determination in a world where globalisation means Hollywood."

The creation of Sony BMG makes it the second largest music group in the world after Vivendi's Universal. Other major players include Warner and EMI.

Sony BMG, which is based in New York, sees the merger as good for the industry which has faced difficult trading conditions and a shift in how music is bought by consumers.

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What now for EMI?
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