|Sony’s move from joint to sole control of EMI Music Publishing has been approved today by the European regulator. This take-over allows Sony to double its catalogue of songs (from 2.16m to 4.21m compositions).|
Helen Smith, IMPALA’s Executive Chair, commented: “This goes against the regulator’s own precedents. In 2012, it ruled that divestments were required for Sony to become a minority shareholder. Now that Sony is acquiring 100% control of EMI, it is being given unconditional approval. This is inconsistent and simply doesn’t stack up. It is a poor advert for European merger control and sends an alarming message to independent businesses in all sectors, not just music.”
If the decision stands, Sony would be the most powerful major in the market, by far. With over 4.21m compositions, a huge pool of writers, and the ability to combine recordings and publishing, it would control more music than any other player in the sector.
IMPALA recently published an analysis showing that when combined with EMI Music Publishing, Sony’s control of the national charts would exceed 70% on average in countries like Italy (77%), UK (73%), France (73%), Netherlands (72%) and reaching the peak of 82% in Spain.
Helen Smith continued: “This is bad news for the music sector and the digital single market. Sony will have a near monopoly over the charts and the whole music value chain will lose out as a result. Songwriters, composers, independent labels and publishers, digital services, and of course music fans, will all be worse off. This decision has dealt a significant blow to innovation and cultural diversity in Europe.”
Commenting on what happens next, Helen Smith said: “IMPALA will review this decision very carefully, and we expect others will too. This is simply too important to let go. It undermines eighteen years of robust merger control in the music sector.”
Smith concluded: “The outcome is perplexing. It sends a message that a move from 4 to 3 in a market will simply be approved if done in stages rather than in one transaction. It could be seen as gaming the system and raises questions about whether we need a review of how European merger control rules apply to cases of joint to sole control.”
The decision follows an initial investigation during which the European regulator consulted competitors and suppliers, as well as composer and author groups. The full non-confidential version of the decision will be published in the coming weeks.
IMPALA was established in April 2000 to represent European independent music companies operating in both the recorded music and music publishing businesses. One of IMPALA’s missions is to keep the music market as open and competitive as possible and it was instrumental in securing a key vote on copyright and platforms in the European Parliament recently. IMPALA has an impressive record in competition cases in the music sector. The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence. It also won a landmark judgment in 2006 in the Sony/BMG case, and when Sony acquired 30% of EMI publishing in 2012, it was at the cost of significant divestments. The biggest set of remedies proportionately ever in a merger case was secured later that year, when UMG was forced to sell two thirds of EMI records and had to accept ten years of scrutiny over the terms of its digital deals. When WMG bought Parlophone in 2013, IMPALA secured a hefty divestments package for its members. On top of mergers, IMPALA has also been involved in other anti-trust cases involving the music sector, such as the abuse complaint against YouTube in 2014 and the call for regulating unfair business practices by large online players. See the organisation’s other key achievements in IMPALA’s milestones.