Brussels, 22nd May 2018
As news broke this morning of Sony’s intention to buy out most of its partners in EMI Music Publishing, independent music companies warn that the move will face regulatory opposition because it would stifle competition online and offline.
Sony now needs to notify the new deal to the European Commission, the EU’s competition authority. Helen Smith, Executive Chair of IMPALA, said: “The European Commission will want to avoid reinforcing the Sony/Universal duopoly, the two horse race which started in 2012 with the sale of EMI. This is a step too far and I would expect to see an in-depth investigation in the EU and other key jurisdictions."
Such a sale would result in Sony controlling 90% of EMI Publishing – with the remaining 10%, controlled by the Jackson Estate, possibly also up for sale in the coming weeks or months.
This confirms the concerns expressed by IMPALA back in 2012 when the European Commission cleared the acquisition of EMI publishing by a consortium including Sony/ATV, and then again in 2016 when the Commission cleared Sony’s move from joint to sole control of Sony/ATV. It shows that ultimately, Sony is taking complete control of EMI publishing, while the initial deal was structured as a consortium to get this bid approved by the regulatory authority.
Helen Smith concluded: “Today, Sony is already by far the world’s largest music publisher and an indispensable trading partner controlling over 2.3 million copyrights. If this sale was to happen, its market power would be reinforced with serious competition issues, including excessive bargaining power when negotiating with collecting societies and the authors they represent, as well as other actors in the value chains such as labels and online services.”
IMPALA was established in April 2000 to represent European independent music companies. One of IMPALA's missions is to keep the music market as open and competitive as possible. IMPALA has an impressive record on 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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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. IMPALA has also submitted observations on Apple’s bid to acquire Shazam. See the organisation's other key achievements in IMPALA's milestones.