Sony Music

The UK’s Competition & Markets Authority Opens A Comprehensive Review Of Sony’s AWAL Deal

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LONDON (CelebrityAccess) — Competition regulators in the UK have opened a comprehensive phase 2 review of Sony Music Entertainment completed purchase of London-based independent label services company AWAL after Sony reportedly failed to provide sufficient information to allay competition concerns.

Following a preliminary, or phase 1 investigation of the deal to acquire AWAL, which Sony completed in May for a reported $430 million, the UK’s Competition & Markets Authority found that the deal raises competition concerns in the recorded music sector.

On September 7th, the CMA gave Sony 5 working days to “address the CMA’s concerns” or face an in-depth Phase 2 investigation into the deal. However, on September 10th, Sony told the CMA that it planned to provide no additional undertakings about the acquisition.

According to the CMA, its phase 1 investigation determined that both AWAL and Sony Music would have been competitive rivals in the sector. The CMA also said they found evidence that Sony intended to expand The Orchard’s offering, which would have brought it into further competition in the indie sector with AWAL.

“The music industry forms an important part of the UK’s flourishing entertainment sector, and it’s essential that distributors continue to compete to find new and creative ways of working with artists,” Colin Raftery, Senior Director at the CMA said.

“We’re concerned that this deal could reduce competition in the industry, potentially worsening the deals on the table for many music artists in the UK, and leading to less innovation across the industry,” Raftery added.

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