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Sony files paperwork with European Commission over EMI deals

By | Published on Monday 24 September 2018

EMI Music Publishing

The European Commission has confirmed that it has now been formally notified of Sony Corp’s bid to take complete ownership of EMI Music Publishing. The EC has now set 26 Oct as a provisional deadline to rule on the proposed acquisition, though it may at that point simply announce a more detailed investigation into the deal.

Sony Corp, of course, led a consortium to buy the old EMI Music Publishing business in 2012, appointing its own music publisher, Sony/ATV, to administrate the EMI rights. Earlier this year it announced its intent to buy out all but one of the other investors involved in the 2012 deal. It then subsequently confirmed that a separate arrangement had been agreed with the Michael Jackson estate, which also had a stake in the EMI catalogue.

Those transactions would therefore make EMI Music Publishing a wholly-owned subsidiary of Sony Corp, which would presumably properly merge it with Sony/ATV. Once the entertainment conglom’s global music publishing business is a combined wholly-owned entity, it could more closely align Sony/ATV with the Sony Music record company. Especially once long-term Sony/ATV boss Marty Bandier has stood down next year.

The transactions are opposed by the independent music community in Europe. And pan-European indie music trade body IMPALA reasserted that opposition as soon as it was confirmed Sony had now formally filed its paperwork with competition regulators in the European Union. Those regulators must now investigate the deals and decide whether they create competition law concerns.

IMPALA boss Helen Smith told reporters: “This transaction would disrupt competition and harm consumers in an already overly concentrated music market. Given recent precedents set by the European Commission, we believe Sony’s take over will face stiff opposition”.

With that in mind, IMPALA reckons Sony’s EMI deals will require a more detailed second phase investigation by EU competition regulators.

Citing music acquisitions elsewhere in the Sony empire, especially by its label services business The Orchard, Smith added: “Sony’s power will be a particular concern in European countries where the EU already concluded in 2012 that Sony would control too much repertoire. The European Commission will be concerned about competition and higher consumer prices, as well as Sony’s recent moves to grab market share in the digital distribution market”.

“The only solution is to block the deal now”, Smith concluded. “This is necessary to avoid long term harm for consumers as well as other players in the music sector, from writers to streaming services, independent publishers, collecting societies and record companies. It also goes against key European objectives in terms of cultural diversity and SMEs and cuts across the EU’s digital single market strategy”.

It remains to be seen how Sony seeks to counter the issues raised by IMPALA and others. It will likely argue that its power in Europe is limited because the collecting societies, rather than the publishers, license song rights in most scenarios, especially with non-Anglo-American repertoire. It may also ultimately offer to sell off some of its catalogue in order to smooth the way for approval.