European Commission Approves Sony And Mubadala’s Takeover Of EMI’s Music Publishing Business, Subject To Conditions

The European Commission has accepted under the EU Merger Regulation the suggestive achievement of joint command over the music publishing business of EMI Group, a British company, by Sony Corporation of the USA and Mubadala Development Company PJSC, an investment fund founded in the United Arab Emirates. The conclusion is dependent upon the deprivation of the worldwide publishing rights to four catalogues and the musical pieces of 12 contemporary authors. In context of these commitments, the Commission settled that the undertaking would not increase competition burdens.
Commission Vice President in control of competition policy Joaquín Almunia said: “Sony and Mubadala have offered to divest valuable and attractive catalogues containing bestselling titles as well as works of successful and promising authors. I am therefore satisfied that the competitive dynamics in the online music publishing business will be maintained so as to ensure consumer choice and cultural diversity.”
The Commission’s primary analysis found that the transaction, as primarily informed, raised serious doubts as to its affinity with the internal market in the area of online licensing of copyrights. The Commission’s analysis fixated, in particular, on the merged entity’s ability to control the online licensing of Anglo-American chart hits in the European Economic Area (EEA). Anglo-American chart hits are an indispensable part of any online platform offering to consumers. Post transaction, the merged entity would have fully or partially owned publishing rights in more than half of chart hits in the UK and Ireland. Such market power would have likely affected customers’ ability to license music not only in these countries but also at multi-territorial and pan-European levels.
During the first-phase review, the parties submitted commitments to divest the worldwide rights in relation to works included in four catalogues – namely Virgin UK, Virgin Europe, Virgin US, and Famous Music UK – and to the recent and future musical works of 12 contemporary Anglo-American authors, some of whom have future delivery obligations towards the parties. The catalogues to be divested comprise many best-selling titles and include the rights to works by leading authors such as Gary Barlow, Ozzy Osbourne, Robbie Williams, Ben Harper, Lenny Kravitz, Placebo and The Kooks.
The Commission therefore concluded that, subject to these divestments, the transaction would not significantly impede effective competition in the EEA or any substantial part of it.
The transaction was notified to the Commission on 27 February 2012.
Companies and products
Sony Corporation of America, the US subsidiary of Sony Corporation, headquartered in Japan, is a leading player in the music recording business. Sony Corporation is also active in the music publishing business through its joint venture with the Michael Jackson Estate, Sony/ATV.
Mubadala Development Company PJSC, wholly owned by the Government of the Emirate of Abu Dhabi in the United Arab Emirates, is a public joint stock company focused on investment and development.
The target business consists of the worldwide music publishing activities of the EMI Group. The EMI group, a British company based in London, is a leading player in the music industry.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not present competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

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