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IMPALA criticises European Commission’s Sony/ATV ruling

By | Published on Wednesday 3 August 2016


Somewhat unsurprisingly, pan-European indie label trade group IMPALA yesterday slammed the decision made by the European Union’s competition regulator to green light Sony Corp’s deal to take complete ownership of Sony/ATV without further investigation or any remedies being proposed.

As much previously reported, Sony’s music publishing business has long been a joint venture with Michael Jackson – or now the Michael Jackson Estate – but back in March the entertainment giant announced it had agreed to buy the estate out of the songs business. The deal was subject to regulator approval, but the European Commission – the regulator most likely to intervene – this week gave the acquisition the go ahead.

IMPALA was one of various parties which objected to the deal, arguing that it gave Sony Corp – which will now own out right the world’s biggest music publisher and second biggest record company – too much dominance in the music rights market. But a spokesman for the Commission said that “the transaction will not materially increase Sony’s market power vis-a-vis digital music providers compared to the situation prior to the merger”.

Commenting on the decision, IMPALA said in a statement yesterday: “This decision follows a preliminary investigation during which the Commission examined the views of customers and competitors. IMPALA and others raised concerns that the transaction would reinforce the market power of the world’s biggest music publisher, creating serious competition problems, including for online platforms and consumers”.

“Despite this”, the statement continued, “the EU has found that the transaction wouldn’t change the current situation materially. This often happens in cases involving a change of ownership, which typically come under less scrutiny than other transactions. [But] market participants had argued that this buyout is not a simple change joint to sole control transaction. IMPALA described the buyout as ‘transformative’ and urged the Commission to open a detailed phase two investigation and/or impose tough remedies”.

Criticising the EC’s conclusion, IMPALA chief Helen Smith added: “This decision is clearly wrong. It goes against the EU’s previous analysis of concentration in music, as well as the concerns raised during this market investigation. We will need to read the decision in full when published to understand properly why the Commission has allowed this transaction to go ahead – there is a fundamental flaw somewhere”.