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 independent music companies. 99% of Europe’s music companies are SMEs. Known as the “independents”, they are world leaders in terms of innovation and discovering new music and artists - they produce more than 80% of all new releases. SME’s also produce 80% of Europe’s jobs. Their potential is enormous but is hampered by complex barriers to trade and severe market access problems. The impact on diversity, consumer choice and pluralism is clear. Over 95% of what most people hear and see, whether on radio, retail or the internet, is concentrated in the hands of four multinationals, known as the majors.
Cultural and creative SMEs are now officially recognised by the EU as “the drivers of growth, job creation and innovation”. IMPALA expects the EC and its member countries to put in place key investment, digital and market access measures. Fostering Europe's economy of culture and diversity is one of the EU's top priorities in becoming the world's leading knowledge economy. Culture is a bigger earner than any of chemicals, automobiles or ICT manufacturing and provides more than 3% of Europe's jobs. IMPALA has its own award schemes to help promote cultural diversity and new talent and highlight the artistic contribution of independent music. IMPALA award winning artists include Efterklang, Adele, Manu Chao, Radiohead, Agnes Obel, Caro Emerald and Sigur Ros.