Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Music-licensing joint venture subject to in-depth EC investigation, (Jan 14, 2015)
Organizations Mentioned:FÖreningen Svenska Tonsä | Gesellschaft fü | PRS for Music Limited (PRSfM) | hrungs-und mechanische Vervielfä | ltigungsrechte (GEMA). | r musikalische Auffü | ttares Internationella Musikbyrå | u.p.a.(STIM)
By Edward L. Puzzo, J.D.
Following a preliminary investigation, the European Commission has opened an in-depth investigation into the competitive impact of a proposed joint venture between three collective rights management organizations (CMOs) for the online licensing of musical works, the EC announced today.
The three CMOs—PRS for Music Limited (PRSfM) of the United Kingdom, Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. (STIM) of Sweden, and Gesellschaft für musikalische Aufführungs-und mechanische Vervielfältigungsrechte (GEMA) of Germany—manage the copyrights of authors, performers, and writers of musical works as well as grant licenses on their behalf and redistribute the royalties collected from the use of their copyrights (European Commission case number M.6800).
Digital service providers (DSPs) furnish online services to final customers, such as music downloading or streaming. In order to lawfully operate in the market for online music services, DSPs must secure licenses from each of the CMOs managing the relevant copyrights in the music works they would like to offer on the market.
The Commission's preliminary investigation raised competition concerns because, after the proposed venture is finalized, the number of meaningful market players would be reduced from four to two. Further, PRSfM, STIM, and GEMA would not offer multi-national licenses for their repertoire individually. DSPs could obtain those only from the joint venture. The Commission is concerned that increased bargaining power may enable the joint venture to charge higher prices and to grant worse commercial terms and conditions to DSPs. This, in turn, could lead to higher prices, less choice, and less innovation for digital music end users in the EU.
The EC has 90 working days, until May 29, 2015, to make a final decision on whether the proposed transaction would significantly impede effective competition in the European Economic Area (EEA).
Companies: PRS for Music Limited (PRSfM); Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a.(STIM); Gesellschaft für musikalische Aufführungs-und mechanische Vervielfältigungsrechte (GEMA).
News: Antitrust AcquisitionsMergers