SONY/EMI DEAL NOTIFIED TO EUROPEAN REGULATORS – INDEPENDENTS WARN OF DANGERS OF INCREASED POWER
Brussels – 28th February 2012
As Sony finally notifies its deal to acquire EMI music publishing, IMPALA confirmed its opposition, warning that the deal would give Sony excessive power and should be blocked.
The concerns raised by the European Commission the last time it looked at music publishing concentration centered around the ability of large publishers to control prices and other terms, even in negotiations with much bigger players such as iTunes. This is because they control so much repertoire, making them an indispensable trading partner. These concerns are likely to have even more relevance today.
The independents are also concerned that the deal would give Sony too much power over collecting societies as well as vital industry negotiations, such as the Cannes Agreement, which sets operating terms for societies. They also point out that the deal would reinforce the duopoly effect with Universal, who itself is currently under regulatory scrutiny over its attempt to buy EMI on the recording side.
Helen Smith, Executive Chair, said: “However this deal is structured in terms of finance and ownership, the result is the same – Sony would increase its negotiating power to an unacceptable extent. We expect the regulators to block both Sony and Universal’s bid to buy EMI.”
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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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.
IMPALA – Independent Music Companies Association
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