Independent producers appeal vs Sony-BMG approval

BRUSSELS (Reuters) - An independent group of music producers asked a European Union court on Monday to throw out -- for a second time -- approval by Brussels competition regulators of a major recorded-music venture by Sony and BMG.

In addition, the European Union's highest court said it would decide a related question on July 10.

So far, the decisions make no practical difference to Japanese electronics and entertainment giant Sony and BMG, owned by Germany's Bertelsmann. Bertelsmann is intensifying talks with Sony to pull out of the venture, media have reported.

The EU's executive European Commission first decided in 2004 that Sony and BMG could go ahead with their venture. The bloc's Court of First Instance in 2006 overruled that decision after a challenge by the independent producers group, Impala.

The Commission appealed against the CFI decision. The EU's highest court, the European Court of Justice, will decide on that case on July 10.

In December last year, an adviser to the highest court recommended that it back the CFI decision and reject the Commission appeal. The top court follows its advisers' suggestions about half the time.

While that appeal has been making its way through the courts, the Commission reexamined the Sony-BMG joint venture and approved it again in October 2007.

Impala is now challenging that second approval.

"Impala believes the Commission repeated many of the errors that it made before, despite the court's judgment in Impala's favor in 2006," the group said in a statement, announcing its latest appeal at the CFI.

"As the music sector is highly concentrated, Impala's position is that music mergers should not be allowed unless far-reaching remedies are put in place to protect market access and promote market recovery," it said.

Helen Smith, executive chair of Impala, said: "We still seem to be some way off relying on the regulators to guarantee a free and open and competitive market."

The Commission said it had gone out of its way in October to avoid the errors that led to its 2004 approval being reversed.

(Reporting by David Lawsky; Editing by Dale Hudson)