Brussels, 11th April 2014
European Competition Day event: IMPALA calls for an open and diverse digital market and a 'recasting' of competition policy in cultural markets
The European Competition Day event is a great opportunity to take stock of Europe's competition policy. It gives policy makers and citizens food for thought as Europe enters a new critical stage where the digital market, led by music and other cultural sectors, will be the principal vector of economic and social power.
It is also time to reflect on what Europe has already achieved so far.
IMPALA's Executive Chair Helen Smith said: "In the framework of European Competition Day, let's applaud Competition Commissioner Joaquin Almunia's tough stance on concentration in the music market and build on it".
When the European Commission had to review Universal's bid to buy EMI and reinforce its dominance, Europe stood out internationally. The European Commission underlined the importance of a healthy independent sector for competition and warned of the dangers of over-concentration for the development of the digital market. As a result, Universal had to sell two-thirds of EMI, and its digital contracts will be monitored for 10 years.
At the same time, the European Commission green-lighted IMPALA and Merlin's groundbreaking agreement with Warner Music (WMG) to build capacity within the independent sector (see statement here). The music market will now see a significant increase in the independents' market share.
The next step should be to 'recast' competition policy in cultural markets to ensure Europe builds on the essential innovation and diversity provided by its SMEs. In music this is vital, with the independent sector producing over 80% of all new releases in Europe.
The European Commission is also expected to look at the digital market in the same way as it has tackled other sectors dominated by the operators of 'essential facilities' who attempt to control multiple points in the value chain.
Helen Smith added: "We look to Europe to lead the way in creating the best conditions anywhere in the world for a competitive music market. We also need to build on Europe's leading position in the world's digital market and it's clear some 'unbundling' will be essential when it comes to the online market's 'essential facilities'. The Google search case will turn out to be the 'tip of the iceberg'. These are the key challenges for competition policy today and Europe should take the lead."
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.