On October 26 the European Commission gave unconditional clearance to Sony’s acquisition of sole control over EMI Music Publishing (“EMI MP”). The transaction combines the recorded music activities of Sony, the music publishing activities of its subsidiary Sony/ATV, and the music publishing activities of EMI MP.
Independent music companies association IMPALA raised concerns with the transaction, claiming that Sony would enjoy excessive bargaining power post-transaction. As in previous transactions in music recording and publishing, the Commission’s competitive analysis focused on the scope for the parties to use a strategy of rights withdrawal to exercise bargaining power in negotiating online rights with digital service providers such as Spotify and iTunes. The parties demonstrated that there was no credible basis for this hypothesis for a number of reasons, including pre- and post-transaction corporate governance arrangements for EMI MP, and the scope for authors to switch between music publishers in response to any withdrawal of rights. The parties also extended previous “control share” analyses undertaken by the Commission, using more comprehensive data than previously available to demonstrate that the parties’ position within the European market for rights licensing would not give rise to bargaining power concerns.
RBB worked with Cleary Gottlieb Steen & Hamilton, counsel to Sony, throughout the notification.
