Brussels, 28th June 2012
The European Commission has released a non-confidential version of its decision on Sony/EMI earlier today, explaining its approval of the Sony/EMI publishing merger on 19th April, subject to remedies.
Following an extension of the initial Phase 1 investigation, during which Sony twice submitted remedies' proposals to try and deal with the problems identified by the EC, this decision was reached without market-testing the revised remedies. Neither did the EC open a more detailed investigation as it decided to do for the proposed Universal/EMI recording merger.
The decision sets out the Commission's reasons for reaching its conclusions, some of which will have a broader impact. For example, it confirms that neither online customers nor piracy are capable of restraining excessive market power. It also confirms that the EC's view of Sony/EMI was based on its particular management structure.
Helen Smith, IMPALA's Executive Chair, commented:
"We welcome the decision's confirmation that neither online customers nor piracy are capable of restraining excessive market power in music. It also acknowledges that online platforms are being asked to pay more for Anglo-American music than local music, which is exactly what we predicted. Against that backdrop, the merger is bad news for publishers and writers, as well as for collecting societies and any label or online service which needs to be able to rely on fair terms. We believe the remedies do not go anywhere close to securing future competition. We now need to study the EC's reasons in detail with our legal team to decide next steps."
The EC decision can be downloaded here.
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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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.