In September, European indies trade body IMPALA urged European regulators to fully investigate Sony’s planned acquisition of EMI Music Publishing. IMPALA argued that a precedent was set by the European Commission in 2012, when it ruled that divestments were required for Sony to become a minority shareholder.
IMPALA has now stepped up those concerns, after new analysis of national European music charts for 2017 that the indies body says raises further issues about the true impact of Sony’s takeover. According to IMPALA, Sony would control on average around 70% of key European market charts. The EC typically intervenes where market shares exceed 50%.
The results of the research were obtained by examining the weekly published singles chart for the first complete week of each month of 2017 in each territory. This involved identifying tracks featuring Sony or EMI controlled compositions, adding tracks where Sony own or distribute the recording and taking out the overlap. The figures include an estimate for tracks Sony distributes. Anglo-American repertoire was the main focus, as this is what the EC has concentrated on in previous merger control cases.
According to the research, the findings reveal that when combined with EMI Music Publishing, Sony’s control of the national charts in 2017 was:
Spain: average 82%, range 78% to 89%
Italy: average of 77%, range 69% to 89%
UK: average 73%, range 62% to 87%
France: average 73%, range 64% to 81%
Netherlands: average 72%, range 59% to 87%
Ireland: average 70%, range 59% to 86%
Sweden: average 68%, range 60% to 81%
The results have now been submitted to the antitrust watchdog in Brussels, which has until October 26 to reach an initial view of the transaction, a deadline that can be extended in certain circumstances.
Speaking about the research, Helen Smith, executive chair of IMPALA commented: “These figures far exceed the maximum the EC has already established. They reveal what we have been highlighting all along, that Sony would have a near monopoly grip over the charts. That would give it unprecedented market power over playlists, radio and other routes to market. This confirms the real risk of the transaction and the need for the EC to block it outright.”
Smith added: “Bearing in mind that the EC has intervened previously where these shares exceeded 50%, to then reduce them to below 45% after divestments, this research underlines the huge risks associated with this transaction. Not one of the territories examined so far is within the EC’s own parameters for avoiding harm to consumers. These figures drive home the negative impact this takeover would have on cultural diversity and the need to stop this transaction outright.”
IMPALA has stated that it will continue its analysis in other territories and will submit the results to the EC in due course. Other organisations that have opposed the takeover include BASCA and ECSA.
Sony already has effective control of the EMI catalogue through the consortium it led to buy EMI's publishing assets in 2012. It has yet to comment on the antitrust investigation, although when the proposed deal was first announced in May, Kenichiro Yoshida, president and CEO of Sony Corporation said: "We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry. The music business has enjoyed a resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services. In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth."