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Sony’s latest EMI deal should be cause of concern for regulators, say the indies 

By | Published on Wednesday 1 August 2018

Sony/ATV

IMPALA, which speaks for the indie music community in Europe, has responded to Sony Corp’s announcement that it is buying the Michael Jackson estate out of the EMI Music Publishing business. It says that the news heightens regulatory concerns about the entertainment conglom’s plan to consolidate its dominant position in the music publishing sector.

Sony, of course, led a consortium of investors to buy the EMI Music Publishing company back in 2012. Then in May this year, Sony confirmed it had agreed a deal to buy most of those other investors out of the EMI business, giving it a 90% stake. The remaining slice was controlled by the Michael Jackson estate. But, in a financial results update released earlier this week, Sony Corp revealed it had now also done a deal to acquire those shares as well.

It means that Sony will own EMI Music Publishing outright. It seems likely the entertainment firm will then properly merge the EMI songs business with its own global music publishing company Sony/ATV. As it is, Sony/ATV has been administering the EMI repertoire ever since the 2012 acquisition, but this would see the two publishing catalogues combined into one.

These deals are subject to regulator approval, including in Europe. Back in 2012 the Sony-led deal got the all-clear from regulators, albeit on the condition it offloaded some repertoire. One of the reasons regulators OKed the transaction was because – although day-to-day it would see music publishing majors Sony/ATV and EMI become one – behind the scenes EMI would still be owned by the consortium of investors.

Sony’s critics in the indie sector – who opposed the 2012 acquisition too – argue that these latest deals, which will mean the EMI catalogue is wholly controlled by Sony, raise a whole load more competition law issues. And IMPALA boss Helen Smith says these developments – especially now that they will give Sony 100% control of EMI – should be a cause for concern for regulators.

She said: “Sony’s results confirm that its bid to acquire control of EMI Music Publishing is 100%. It will make the merger control process even tougher for Sony. The Michael Jackson estate was part of the structure that Sony previously built around EMI. With that falling away, it completely cuts out the safety net that prevented Sony from doing what it liked with EMI publishing”.

She went on: “The European Commission will be acutely aware of this, as that was a key part of its analysis when it first looked into Sony buying shares in EMI. Even then it insisted on divestments, so it is difficult to see how this could be approved. The EC will be particularly concerned about Sony using its new combined power across recording and publishing to leverage more from digital music services and consumers”.

Sony is still filing its paperwork with the relevant competition regulators in relation to these deals. After that, said regulators will consult various stakeholders about the possible impact of the merger.



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