BRUSSELS, Belgium (CelebrityAccess) — Sony has notified the European Commission that it has completed its initial filing ahead of their planned takeover of EMI Music Publishing, initiating a regulatory review process to assess ramifications for competition in the market.
The EU Competition Authority now has until October 26th to complete their initial assessment after which they will either clear the deal or recommend it for further review.
In the event that a further review is required, the Commission will have an additional 90 working days to determine if the merger is in compliance with EU competition regulations.
When completed, the deal would further expand Sony’s dominance in the world of music publishing. Sony/ATV is already the largest music publishing operation in the world and following the proposed acquisition, Sony would also hold 90% of EMI Music Publishing, which owns or administers more than 2.3 million songs. EMI’s catalogue ranges from classics by Queen and Carole King, to contemporary music from the likes of Drake and Kanye West.
The remaining ten percent of EMI Music Publishing is retained by the Jackson Estate.
The deal, first announced in May, will see Sony pay a total of about $2.3 billion for EMI, which they are acquiring from the Abu Dhabi-based consortium Mudabala Investment.
Other stakeholders in the world of music publishing, including the IMPALA, an association of independent music publishers, is hoping that the Competition Authority will press Sony hard on the deal.
According to IMPALA, precedents set by the Commission in 2012, when it ruled that divestments were required for Sony to become a minority shareholder, indicate that Sony may face “stiff opposition” with the Commission.
“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,” said Helen Smith, IMPALA’s Executive Chair.
“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,” Smith added.
“The only solution is to block the deal now,” concluded Helen Smith. “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.”