If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Accordingly, Smith says the new music behemoth would “dictate terms to online services, dominate playlists, control collecting societies and capture all key routes to market.” The could create significant damage for “online services, competitors, authors, and consumers,” according to IMPALA’s warnings.