Independent music companies slam decision to green light the Sony/EMI merger

26 October 2018 - Press release

Sony’s move from joint to sole control of EMI Music Publishing has been approved today by the European regulator. This take-over allows Sony to double its catalogue of songs (from 2.16m to 4.21m compositions).
 
Helen Smith, IMPALA’s Executive Chair, commented: “This goes against the regulator’s own precedents. In 2012, it ruled that divestments were required for Sony to become a minority shareholder. Now that Sony is acquiring 100% control of EMI, it is being given unconditional approval. This is inconsistent and simply doesn’t stack up. It is a poor advert for European merger control and sends an alarming message to independent businesses in all sectors, not just music.”
 
If the decision stands, Sony would be the most powerful major in the market, by far. With over 4.21m compositions, a huge pool of writers, and the ability to combine recordings and publishing, it would control more music than any other player in the sector.
 
IMPALA recently published an analysis showing that when combined with EMI Music Publishing, Sony’s control of the national charts would exceed 70% on average in countries like Italy (77%), UK (73%), France (73%), Netherlands (72%) and reaching the peak of 82% in Spain.
 
Helen Smith continued: “This is bad news for the music sector and the digital single market. Sony will have a near monopoly over the charts and the whole music value chain will lose out as a result. Songwriters, composers, independent labels and publishers, digital services, and of course music fans, will all be worse off. This decision has dealt a significant blow to innovation and cultural diversity in Europe.”
 
Commenting on what happens next, Helen Smith said: “IMPALA will review this decision very carefully, and we expect others will too. This is simply too important to let go. It undermines eighteen years of robust merger control in the music sector.”
 
Smith concluded: “The outcome is perplexing. It sends a message that a move from 4 to 3 in a market will simply be approved if done in stages rather than in one transaction. It could be seen as gaming the system and raises questions about whether we need a review of how European merger control rules apply to cases of joint to sole control."
 
The decision follows an initial investigation during which the European regulator consulted competitors and suppliers, as well as composer and author groups. The full non-confidential version of the decision will be published in the coming weeks.