Brussels, 2nd August 2016
IMPALA slams EU decision to clear Sony’s buyout of Sony/ATV
Today the European Commission has decided to clear Sony’s buyout of the late Michael Jackson estate's shares in Sony/ATV.
This decision follows a preliminary investigation during which the Commission examined the views of customers and competitors.
IMPALA and others raised concerns that the transaction would reinforce the market power of the world’s biggest music publisher, creating serious competition problems, including for online platforms and consumers.
Despite this, the EU has found that the transaction wouldn’t change the current situation materially. This often happens in cases involving a change of ownership from joint to sole control, which typically come under less scrutiny than other transactions.
Market participants had argued that this buyout is not a simple joint to sole control transaction. IMPALA described the buyout as “transformative” and urged the Commission to open a detailed Phase 2 investigation and/or impose tough remedies.
Helen Smith, Executive Chair of IMPALA, commented, “This decision is clearly wrong. It goes against the EU's previous analysis of concentration in music, as well as the concerns raised during this market investigation. We will need to read the decision in full when published to understand properly why the Commission has allowed this transaction to go ahead – there is a fundamental flaw somewhere.”
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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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.