Independent record companies challenging the merger of Sony and BMG have suffered a setback as Europe’s highest court reversed an earlier legal ruling that criticised the deal.

The decision means that the joint venture, set up in 2004 between Japanese electronics and entertainment giant Sony and Germany’s Bertelsmann, cannot now be overturned.

Impala, a lobby group representing 2,000 small music labels, had argued that Sony and BMG would dominate the market forcing out smaller rivals.

Copyright © 2012 euronews