20/02/12: IMPALA welcomes start of Universal/EMI regulatory process in Europe, expects outright 'no' to protect online market and consumer prices

 

Monday 20th February 2012
With Universal finally notifying its EMI deal in Europe two months after filing in the USA and three months after the sale was announced, independent music companies welcome the start of the official regulatory process.

Helen Smith, IMPALA Executive Chair commented: "The clock has finally started ticking in Europe. Ultimately we expect this to lead to an outright rejection of both Uni/EMI and Sony/EMI mergers. Keeping the online market as open as possible is essential for competition and for responding to piracy, as well as other market problems. Turning music into a two-horse race would hamper the natural development of the market and increase prices. No level of divestments or behavioural undertakings would prevent that from happening."

IMPALA will now supplement the evidence already provided to the regulators in early January. IMPALA points out that Europe has already effectively set a maximum size for music companies, which both Universal and Sony exceeded before they started bidding for EMI. Piracy and the importance of the online market, as well as other current market conditions, require an even stricter regulatory line on consolidation today than ever before. Leniency would simply result in market distortions such as increased prices, reduced output, market access restrictions, lower cultural diversity and reduced consumer choice.

The European Commission now has to decide whether it should launch a detailed investigation. IMPALA has already received a questionnaire and will reply in due course. The same is expected on Sony/EMI. IMPALA confirms it will continue to co-operate fully with the regulators on both sides of the Atlantic, to make it clear why the deals would be the worst possible outcome for competition, artists and consumers, as well as for the development of a thriving and diverse online market.


 

About IMPALA
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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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.

 

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