Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERG ER-REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels,  26.10.2018  
C(2018 ) 7293 final  
  
 
 
 
To the notifying parties   
Subject : Case M. 8989 – Sony / EMI Music Publishing  
Commission decision pursuant to Article 6(1)(b) of Council 
Regulation No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 21 September 2018, the European Commission received a notifi cation of a 
proposed concentration pursuant to Article 4 of the Merger Regulation  by which 
Sony Corporation of America ("Sony" or the "Notifying Party", USA), 
belonging to the group Sony  will acquire within the meaning of Article 3(1)(b) 
of the Merger Regu lation  sole control of the whole of EMI Music Publishing 
("EMI MP", United Kingdom) (the "Transaction") . Sony is hereafter referred to 
as "the Notifying Party" and Sony and EMI MP are hereafter collectively 
referred to as "Parties".  
1. THE PARTIES  
(2) Sony is a U .S. subsidiary of Sony Corporation of Japan, which, directly and 
through its subsidiaries, is active globally in various businesses, including 
electronics products, games, entertainment services – including motion pictures, 
television programming, recorded  music, and music publishing –,  and financial 
services . 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ('TFEU') has introduced certain changes, such as the 
replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of 
the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  In the published version of this decision, some 
information has been omitted pursuant to Article 
17(2) of Council Regulation (EC) No 139/2004 
concerning non -disclosure of business secrets and 
other confidential information. The omissions are 
shown thus […]. Where possible the information 
omitted has been replaced by ranges of figures or 
a general description.  PUBLIC VERSION  
2 (3) EMI MP is a music publishing business currently jointly controlled by Sony and 
the Mubadala Investment Company PJSC's ("Mubadala"), an investment fund 
based in the United Arab Emirates.  
(4) Sony/ATV Music Publishing ("Sony/ATV") is not a party to the Transaction , 
but has administered EMI MP's catalogue since 2012. Sony/ATV is a music 
publishing company established in 1995 when Sony Music Publishing (a then 
fully owned Sony Corporation subsidiary) and the  music publishing business of 
ATV (which Michael Jackson acquired in 1985 ) were transferred to a 50/50 
venture jointly owned by Sony and the singer/songwriter Michael Jackson. In 
2016, Sony purchased the 50% interest owned by the Michael Jackson Estate, 
which manages the assets formerly owned by Mr. Jackson, thereby acquiring 
sole control of Sony/ATV.3 
2. THE CONCENTRATION  
(5) Pursuant to an Agreement and Plan of Merger dated 29 June 2018, Sony will 
purchase the circa 60% interest in EMI MP controlled by Mubadala for a cash 
consideration of around USD 2.3 billion , acquiring sole control over EMI MP . 
(6) The Transaction therefore constitutes a concentration  within the meaning of 
Article 3(1)(b) of the Merger Regulation .  
3. EU DIMENSION  
(7) The undertakings concerned have a co mbined aggregate world -wide turnover of 
more than EUR 2 500 million (Sony: EUR […]; EMI MP: EUR […]).4 Each of 
them has an EU -wide turnover in excess of EUR 100 million (Sony: EUR […]; 
EMI MP: EUR […]). In each of France, Germany and the United Kingdom, th e 
combined turnover of the Parties exceeds EUR 100 million and their individual 
turnover exceeds EUR 25 million (Germany: Sony: EUR […]; EMI MP: EUR 
[…]; France: Sony: EUR […]; EMI MP: EUR […]; the United Kingdom: Sony: 
[…]; EMI MP: EUR […]). Lastly, the P arties do not achieve more than two -
thirds of their aggregate EU -wide turnover within one and the same Member 
State. The notified operation therefore has an EU dimension pursuant to Art 1(3) 
of the Merger Regulation .  
4. CHANGE FROM JOINT TO SOLE C ONTROL  
(8) The Transaction involves the acquisition by Sony of sole control over EMI MP 
over which it already has joint control. As such, the concentration qualifies in 
principle for simplified treatment, in accordance with paragraph 5 (d) of the 
Commission Notice on a s implified procedure for treatment of certain 
                                                 
3     Commission decision of 1 August 2016 in Case M.8018 Sony Corporation of America/Sony -ATV. 
4   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission 
Consolidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1).  
3 concentrations under Council Regulation (EC) No 139/2004  (the "Notice on 
simplified procedure").5  
(9) In considering whether or not to apply the simplified procedure, it is important 
context that in Sony/Mubadala/EMI ,6 the Commission approved the acquisition 
by Sony and Mubadala of joint control over EMI MP subject to conditions and 
obligations. A key consideration in the clearance decision was that Sony did not 
have full control neither over Sony/ATV  nor over EMI MP due to the joint 
control situation in both entities.7 As the Transaction gives Sony sole control 
over EMI MP, having regard to this precedent the Commission considers that 
the Transaction warrants a closer investigation and a full decision  in accordance 
with paragraph 9 of the Notice on simplified procedure.  
(10) The Transaction follows a second  transaction involving Sony . This  one involved 
Sony acquiring sole control over Sony/ATV previously jointly controlled by 
Sony and the Michael Jackson Es tate, through the acquisition of Michael 
Jackson Estate’s 50% stake. The Commission declared this transaction, pursuant 
to article 6(1)(b) of the Merger Regulation, to be compatible with the internal 
market  in August 2016 .8 
(11) As a result of these two previo us transactions Sony already exercises joint 
control over EMI MP together with Mubadala and has sole control over 
Sony/ATV, its wholly -owned music publishing subsidiary, in charge of 
licensing publishing rights, i.e. the rights to the melody and the lyrics  which are 
transferred from the authors  (i.e. the writers and composers)  to music  publishers , 
which in turn license them to record companies  and other commercial users such 
as online platforms .  
(12) Sony/ATV has administered EMI MP’s catalogue on an exclusive basis under 
an administration agreement since 2012 , managing relationships with EMI MP’s 
existing authors and signing agreements for new authors whose rights are co -
owned by Sony/ATV and EMI MP. Sony/ATV and EMI MP have not competed 
for new authors since 2 012. Downstream, EMI MP has had no independent role 
in licensing its repertoire. Instead, Sony/ATV has had the sole and exclusive 
right to license EMI MP’s various publishing rights offline, while online, 
Sony/ATV has negotiated “blanket” licences9 of Sony /ATV and EMI MP 
content and has represented Sony/ATV and EMI repertoire in direct negotiations 
with Digital S ervice Providers ( hereinafter “DSPs”) .  
(13) Moreover, Sony has no other music publishing interests. The Transaction will 
therefore not lead to any incr ease in market share in the various markets 
involving music publishing (unlike in Sony/Mubadala/EMI, where the 
acquisition led to an increase in Sony's market shares).  
                                                 
5  OJ C 366/5 14.12.2013.  
6  Case COMP/M.6459 Sony/Mubadala/EMI Music Publishing , Commission decision of 19 April, 2012 
("Sony/Mubadala/EMI "). 
7  Sony/Mubadala/EMI, recital 210.  
8  Case COMP/M.8018, Sony Corporation of America/Sony -ATV Music Publishing , European 
Commission decision of August 1, 2016 (" Sony/Sony -ATV") 
9  i.e. licenses covering the entirety of both parties’ Anglo -American repertoire.  
4 (14) In addition, Sony has currently full control and ownership over Sony Music 
Entertainment  ("Sony Music"), a record label  (or record company) in charge of 
licensing recording rights, i.e. the rights to the particular recorded rendition of a 
song which are transferred by the recording artists to record labels. Sony is 
therefore an "integrated mu sic company", having both a publishing division and 
a recorded music division. In the market for the exploitation of online rights, the 
online customers need a licence not only for publishing rights but also for 
recording rights . This is because to make a song available on an online platform 
it is necessary to license the right s both to the notes and the lyrics of that song 
(publishing rights) and to the actual recorded version of the same song  
(recording rights) . To the extent that these recording rights d o not only cover 
songs over which Sony/ATV and/or EMI MP hold publishing rights  (i.e. to the 
extent that they cover at least some songs whose publishing rights are held by 
third parties) , these recording rights expand the list of songs over which Sony 
has control and may therefore increase Sony's market power vis -à-vis online 
music platforms.   
(15) The main change brought about by the Transaction relates to the possibility of 
Mubadala to veto certain commercial decisions of EMI MP. Mubadala, through 
its joint co ntrol over EMI MP, can currently exercise a veto over the acquisition 
of music publishing catalogues or rights and interests in other musical works, as 
well as over the issuance of music publishing licenses negotiated by Sony/ATV 
that it considers not to b e in EMI MP's interest. Mubadala's constraint over any 
possible strategy of Sony that would not be in the best interest of EMI MP will 
disappear post -Transaction.  
5. RELEVANT MARKETS  
(16) In past decisions, the Commission considered that music publishers are active 
on two market levels.10 Upstream, they are active in the supply of publishing 
services to authors. Downstream, music publishers are active in the exploitation 
of works of authors . 
5.1. Market for the provision of music publishing services to authors  
5.1.1.  Relev ant product market  
(17) The services provided to authors include providing artistic and financial 
support,11 matching authors with co -writers and performing artists, ensuring 
legal protection of musical works, promoting authors’ works to potential 
licensees, mar keting and negotiating the licensing of rights, and administering 
authors’ rights (including registrations with and collections from collecting 
                                                 
10  Sony/Mubadala/EMI, recital 19; COMP/M.4404, Universal/BMG Music Publishing , Commission 
decision of May 22, 2007 (" Universal/BMG "), and M.1219  Seagram/Polygram , recitals 11 and 16. 
Sony/Sony -ATV, reci tals 14, 35, and 47   
11  Publishers pay advances to authors against future royalty income. Where a publisher has paid an 
advance to an author, the royalties earned by that author’s work will first be used to recoup the amount 
of the advance (other than any  writer’s share mandated by collecting societies). The author will receive 
royalties (split in the agreed proportions between the author and publisher) only once the publisher has 
recouped the amount paid out to the author in advance. The publisher assumes  the risk of the revenues 
achieved from the exploitation of an author’s work not covering the amount paid out in advance.  
5 societies). In return for providing  these services, a publisher receives a share of the 
royalties generated by a n author’s work.12 
(18) In previous decisions, the Commission defined the upstream market as the 
market for publishing services to authors.13 
(19) The Notifying Party  submits that there is no reason to depart from this market 
definition , for the following reasons . In respect of any given song, authors 
generally contract with a music publisher to exploit all of their rights (rather 
than in relation to separate categories of rights ( e.g. mechanical rights only)), 
and publishers are involved in the exploitation of all of those rights. Music 
publishers exploit the rights in a work for the duration of their contract with an 
author (plus any agreed retention period). No meaningful distinction  is made 
between “front -line” and “back -catalogue” works, and music publishers 
compete to acquire rights to repertoire, and to identify and sign authors and 
catalogues.  
(20) The market investigation in the present case has  not provided  any indications  
that the Commission should depart from its previous findings on  the distinction 
between publishers' upstream and downstream markets. Indeed these activities 
are different  and take place at different levels of the music value chain (although 
they are commercially r elated as music publishers are able to license 
downstream the works and the catalogues of the authors to whom they provide 
music publishing services upstream).  
(21) Accordingly, and consistent with the Commission’s approach in Sony/Sony -
ATV, the Commission cons iders it appropriate to define the relevant upstream 
product market as comprising the provision of publishing services to authors.  
5.1.2.  Relevant geographic market  
(22) In Sony/Sony -ATV and Sony/Mubadala/EMI Music Publishing , the Commission 
identified various factors  suggesting that the market for publishing services 
provided to authors was national in geographic scope, although ultimately it did 
not reach a firm conclusion.14 The Commission conducted its assessment of 
those two transaction s on a national basis.  
(23) Sony s ubmits that there is no reason to depart from the approach followed by the 
Commission in Sony/Sony -ATV and Sony/Mubadala/EMI Music Publishing . 
(24) The market investigation did not reveal any facts that would make it necessary 
to reconsider the geographic market definition of the market for the publishing 
services to the authors.  
(25) The Commission  therefore consider s that the market for the provision of 
publishing services to a uthors is rather national in scope.  
                                                 
12  Some authors – particularly more established authors – do not use the services of a music publisher 
and instead publish their works  themselves.   
13  Sony/Sony -ATV, recital 15.  
14  Sony/Sony -ATV, paragraph 58, and Sony/Mubadala/EMI , paragraphs 62 to 64. See also Case 
COMP/M.4404, Universal/BMG Music Publishing , Commission decision of May 22, 2007 
("Universal/BMG "), recital 61.  
6 5.2. Markets for the exploitation of copyright s  
5.2.1.  Relevant product markets  
(26) In previous decisions in the music sector,15 the Commission identified five 
different categories of copyright s constituting separate product markets at the 
market level where music publishers deal with (prospective) users of works:  
(a) mechanical rights : the right to reproduce a work in a sound recording;  
(b) performance rights : the right for commercial users such as broa dcasters 
(TV or radio stations), concert halls, theatres, night clubs, restaurants to 
divulge a work to the public;  
(c) synchronisation rights : the right for commercial users such as advertising 
agencies or film companies to synchronise music with a visual ima ge; 
(d) print rights : the right to reproduce a work in sheet music;  
(e) online rights : a combination of mechanical and performance rights to 
exploit a work via downloading and/or streaming services. The market for 
the exploitation of publishing rights for online u se (hereafter the market 
for "online rights") is the market where music publishers, such as 
Sony/ATV and EMI, license their repertoire to DSPs, such as Apple, 
Spotify  and Deezer.  
(27) From a demand -side perspective, separate markets for the exploitation of each 
type of right exist because there is no substitutability between the different 
categories of rights. Depending on the intended use of the musical work 
(broadcast, sheet music, us e in a film etc.), the right user requires a license for a 
specific type of right, which is not substitutable with a license for a different 
type of right.  
(28) In addition, the Commission found important differences between the different 
types of rights from a supply -side perspective, the main difference being related 
to the role of the collecting societies.16 Namely, the licensing of mechanical and 
performance rights for offline use is generally carried out by collecting societies 
on behalf of publishers. By c ontrast, synchronization and print rights are 
generally licensed and administered directly by the publishers without the 
involvement of collecting societies. Online rights are subject to a hybrid solution 
whereby mechanical rights over songs authored by wr iters registered to “Anglo -
American” collecting societies (hereinafter " Anglo -American repertoire ") are 
generally licensed directly by publishers  whereas performance rights over songs 
from the Anglo -American repertoire as well as mechanical and performance  
rights over songs authored by writers registered to “Continental European” 
collecting societies (hereinafter " Continental European repertoire ") are licensed 
by collecting societies without any influence from the publishers  as to the level 
of royalties and  on whether or not to grant a license . The different role by the 
collecting societies resulted in different supply conditions as collecting societies 
were legally bound to license on fair and non -discriminatory manner, whereas 
                                                 
15  Univer sal/BMG , Sony/Mubadala/EMI and Sony/Sony -ATV 
16  Sony/Mubadala/EMI, recital 25.  
7 publishers are not subject to  the same obligations. Furthermore, pricing and 
other licensing conditions also differed depending on involvement of collecting 
societies and thus on the control over these terms.  
(29) The Notifying Party did not contest this approach . 
(30) The market investigation  did not reveal any facts that would make it necessary 
to reconsider the product  market definition of the markets for the exploitation of 
publishing copyrights . A majority of competitors and customers  who replied to 
the market investigation consider  that t he market for music publishing rights 
should still be defined according to the distinction between (1) print rights; (2) 
synchronization rights; (3) performance rights (offline, traditional applications); 
(4) mechanical rights (offline, traditional applica tions); and (5) online 
(performance + mechanical) rights.17 The Commission therefore considers it 
appropriate to follow the same approach as in previous decisions and to  define a 
separate market for the exploitation of each major type of publishing right . 
(31) As regards the market for online rights , in Sony/Sony -ATV, the Commission 
considered that the market for online rights should not be further segmented 
according to genres, access devices, and retail model (streaming vs. 
downloading). The Commission left ope n whether  a distinction should be made 
according to the type of repertoire (Anglo -American vs. Continental).  
(32) Sony considers that in the case of online rights , the relevant product market is 
the overall market for the licensing of online rights in musical works and that a 
further segmentation is not justified.  
(33) With regard to the potential subdivisions within the market for the exploitation 
of online rights, d uring the market investigation the vast majority of the 
respondents to the market investigation considered that separate markets should 
not be distinguished according to genres .18 Despite the fact that there exist music 
publishers that are specialised in certa in genres of music only ,19 those publishers 
tend to be marginal as most publishers tend to offer all genres.20  
(34) The market investigation confirmed that it is not appropriate to distinguish 
separate markets within the market for the exploitation of online rights 
according to a ccess device , i.e. between the exploitation of online rights for use 
in mobile applications and the exploitation of online rights for use in other 
online applications , such as tablets and personal computers .21 Market 
respondents general ly agree that such a distinction is not necessary given ( i) the 
convergence between access devices; (ii) the fact that rights are identical 
irrespective of access device; and (iii) the fact that these forms of access are 
competing .22 
                                                 
17 See Questionnaire Q1 to competitors, question 3.1; Questionnaire Q2 to online customers, question 3.1.  
18 See Questionnaire Q1 to competitors, question 7; Questionnaire Q2 to o nline customers, question 7.  
19 See Questionnaire Q1 to competitors, question 8; Questionnaire Q2 to online customers, question 8. 
Only one respondent identified a streaming service specialized in one genre.  
20 See Questionnaire Q1 to competitors, questions 8.1 and 8.2; Questionnaire Q2 to online customers, 
questions 8.1 and 8.2.  
21 See Questionnaire Q1 to competitors, question 6; Questionnaire Q2 to online customers, question 6.  
22 See Questionnaire Q1 to competitors, question 6.1; Questionnaire Q2 to online customers, question 6.1.  
8 (35) As to the potential segmentation of the market for the exploitation of online 
rights based on the retail model (streaming and downloading), a majority of 
competitors  and customers  considered that such a distinction is not 
appropriate.23  Respondents pointed  out that the licensed rights  and the 
repertoire  are identical with differences in licensing terms and conditions 
resulting only from the technical differences between a download and a 
streaming offering.24 Furthermore, on the supply side, these rights are held by 
the same entities regardless of which service (download or streaming) is being 
provided .25 Given, the majority view as well as the recent precedent of 
Sony/Sony -ATV, the Commission considers that the  market for the exploitation 
of online rights should not be further subdivided based on the retail model.   
(36) Finally, a majority of competitors and customers  consider that the two 
repertoires ( Anglo -American vs. Continental ) are part of  the same market.26  
(37) In this regard, t he Commission considers that  no distinction should be made 
according to the type of repertoire. This is because on the supply side, all large 
publishers active in the EEA seek to develop a balanced repertoire comprising 
both Anglo -American  and Continental European repertoire. F rom a demand side 
perspective, DSPs aim at having licenses over the rights of as many songs as 
possible irrespective of whether they belong to the Anglo -American repertoire 
or the Continental European repertoire. All online platforms include both 
repertoires. In this context , the Commission considers that  the market power  of a 
music publisher  vis-à-vis DSPs comes from the importance for DSPs of the 
catalogue of songs under the music publisher's direct control . The Comm ission 
considers that this market power  can only be assessed  by comparing the size and 
the quality of this catalogue with the overall set of songs the DSPs aim to get 
access to  irrespective of whether these songs belong to the Anglo -American 
repertoire or the Continental European one.  It would not be appropriate to 
measure the market power of a music publisher by reference to the share of 
songs it controls within one specific repertoire.   
(38) That being said, the rights for the Continental European repertoire r emain with 
collecting societies whereas all major publishers withdrew their online 
mechanical rights over the Anglo -American repertoire from the collecting 
society system and thus took control over these rights. The market power of 
publishers  should theref ore be assessed by reference  to the size and quality of 
the Anglo -American repertoire that they control as compared to the overall sets 
of rights from both the Anglo -American and the Continental European catalogue 
that DSPs  need to clear.   
(39) Overall, in view of the results of the market investigation, and the market 
definitions applied in previous decisions, the Commission takes the view that  in 
relation to the  downstream activity of the exploiting publishing rights :  
                                                 
23 See Questionnaire Q1 to competitors, question 9 and Questionnaire Q2 to online customers, question 9.  
24 See Questionnaire Q1 to competitors, question 9.1 and Questionnaire Q2 to online customers, question 
9.1. 
25 See Questionnaire Q2 to online customers, question 9.1.  
26 See Questionnaire Q1 to competitors, question 5.1; Questionnaire Q2 to online customers, question 5.1.  
9 (a) The market should be subdivided in to separate markets based on the type 
of rights, i.e. mechanical rights; performance rights; synchronization 
rights; print rights; and online rights.  
(b) The market for the exploitation of online rights is not to be further 
subdivided according to genres, acc ess devices and retail model 
(download vs. streaming).  
(c) The market for the exploitation of online rights should not be further 
subdivided according to the type of repertoire (Anglo -American and the 
Continental).  
5.2.2.  Relevant geographic market  
Commission preced ents 
(40) As regards the geographic market definition, in previous decisions, the 
Commission took the view that, with the exception of the market for online 
rights, the markets for the exploitation of the various publishing rights are 
national in scope.  
(41) With r egard to the market for online rights, in Sony/Sony -ATV,27 the 
Commission  concluded that the market for licensing of online rights was EEA -
wide, at least in relation to the Anglo -American repertoire.  
Notifying Party's view  
(42) Sony also considers that the relev ant market for online rights is EEA -wide in 
scope for the following reasons. First, all major Digital Service Providers 
("DSPs") operate on the basis of at least EEA -wide licences, and even DSPs that 
are not active across the EEA nevertheless generally obt ain EEA -wide licences. 
Second, Sony/ATV's and EMI MP's royalty rates are uniform across EEA 
member states, as are most other terms and conditions ([information on 
Sony/ATV’s licensing terms]). Third, [information on Sony/ATV’s minima]. 
Minima are guarantee d minimum prices that the licensee has to pay regardless 
of the actual revenue generated by the online platforms downstream. It is part of 
the common pricing formula in licences whereby the licensee has to pay the 
higher of the contractual royalty rates or  the guaranteed per -stream/per -
subscriber minima. Sony submitted evidence showing that these variations in the 
minima are driven by differences in downstream DSP pricing across Member 
States to reflect differing levels of consumer purchasing power, rather than by  
market concentration and market shares . 
Commission's assessment  
(43) The Commission considers that the market investigation did not reveal any facts 
that would make it necessary to reconsider the geographic market definition of 
the markets for the exploitation of mechanical rights, performance rights, 
synchronization rights  and print rights. It appears therefore appropriate to 
consider that these markets are still national and not EEA -wide. In any event, 
                                                 
27  Sony/Sony -ATV, recital 67.  
10 the geographic market definition pertaining to these product markets can be left 
open as no competition concerns arise und er any plausible market definitions.  
(44) Overall, the Commission  considers that the finding in Sony/Sony -ATV that the 
market for online rights is EEA -wide  is still valid today . 
(45) First, the Notifying Party provided evidence that all major DSPs operate on the 
basis of at least EEA -wide licences. More specifically, […]% of Sony/ATV’s 
and EMI MP’s revenue from the licensing of Anglo -American repertoire, are 
licensed under agreements with DSPs that are EEA -wide or broader in 
geographic scope, with […]% of revenues  generated by multi -territory licence 
agreements narrower than the EEA and […]% national licenses ([…]).28The 
Notifying Party also provided evidence that even DSPs that are not active across 
the EEA nevertheless generally obtain EEA -wide licences. This cont rasts with 
the situation at the time of Sony/Mubadala/EMI Music Publishing .29  
(46) [Information on the current licences and licensing practice of Sony/ATV and 
EMI MP].30 
(47) Second, the Notifying Party provided evidence that Sony/ATV's and EMI MP's 
royalty rates are  uniform across EEA member states, as are most other terms and 
conditions ([information on Sony/ATV’s licensing terms]). In practice, the 
Notifying Party submitted a review of Sony/ATV’s licensing agreements with 
its principal online customers (by revenue) . This review shows that [information 
on Sony/ATV’s licensing terms ]:31 
(a) In each of the agreements, [information on Sony/ATV’s licensing terms] .  
(b)  For both download and streaming services, [information on Sony/ATV’s 
licensing] the same royalty rate across al l EEA Member States. For ad -
funded and subscription streaming services, the royalty rate is typically 
[…]%; for download services, the royalty rate is typically […]% or […]%, 
but for a given DSP, the rate is the same across all EEA Member States .32 
(c) For each  DSP, the agreements provide [information on Sony/ATV’s 
licensing terms] .33 
(d) Minima for ad -funded streaming services [information on Sony/ATV’s 
minima ].34 
(48) [Information on Sony/ATV’s and EMI MP’s licence negotiations with DSPs] 
variation across territories in the minima that apply for certain subscription 
streaming services. [Information on Sony/ATV’s and EMI MP’s licence 
                                                 
28    See Form CO, paragraphs 6.25 -6.27.  
29  See Form CO, paragraphs 6.29 -6.30.  
30  See Form CO, paragraphs 6.31 - 6.32.  
31  See Form  CO, paragraph 6.33.  
32  There are two isolated exceptions [information on Sony/ATV’s licensing terms]. These variations were 
agree d [information on Sony/ATV’s licensing negotiations], for ease of administration, [information 
on Sony/ATV’s licensing terms] .   
33  [Information on Sony/ATV’s licensing terms] .   
34  [Information on Sony/ATV’s licensing terms ].   
11 negotiations with DSPs] to reflect their downstream pricing strategy, to reflect 
differing levels of consumer purchasing power, [information on Sony/ATV’s 
and EMI MP’s licence negotiations with DSPs ].35  
(49) In any event, Sony submitted empirical evidence showing that these variations 
in the minima correlate with consumer purchasing power, rather than with  
market concentration and market shares. Mo re specifically, the Notifying Party 
provided the results of an empirical analysis showing that based on minima for 
[several DSPs] , variation in music publishing and recorded music minima 
correlate closely with consumer purchasing power, as reported by Eur ostat 2017 
price level index for household final consumption expenditure. The correlation 
coefficient between these two series is 92% for each of music publishing and 
recorded music.36 On the contrary, based on the same licensing agreements, the 
Notifying P arty showed that there is no positive correlation between national 
“control shares” and minima. A music publisher's  control share is the share of 
all songs made available for streaming or downloading by DSPs that that 
publisher  controls through fractional or full publishing rights or even recording 
rights  in the case of an integrated music company . The correlation coefficient 
for publishing (Sony/ATV and EMI MP combined) “control shares” against 
minima is -37%; while the correlat ion coefficient for Sony/ATV, EMI MP, and 
Sony Music’s  combined “control shares” against minima is -10%.  This means 
that minima do not tend to increase when control shares increase.  
(50) The Commission considers that the fact that the minima are adjusted to r eflect 
consumer spending power and do not correlate with control shares shows that 
the variation is due to different levels of income and development rather than 
different competitive conditions in different countries.  This suggests that a 
hypothetical mo nopolist in one specific Member State would not be able to 
profitably  and significantly  increase prices.  
(51) The results of the market investigation confirm this conclusion.  
(52) First, a majority of Sony's competitors confirmed that their licenses for online 
right s were either worldwide in scope or pan -European.37 The major DSPs also 
confirmed that they mainly operate on the basis of at least pan -European 
licenses.38 
(53) Furthermore, the vast majority of Sony's competitors expressing a view on the 
matter acknowledged tha t major terms and conditions of licensing agreements 
by music publishers do not vary across Member States, whether for streaming or 
downloading.  The only two competitors replying that, according to them, major 
terms and conditions vary across Member States , only claimed that  minima per 
subscriber for streaming services var y across Member States and made a 
                                                 
35  The Notifying Party expl ained that the purpose of contractual minima is to broadly reflect the value of 
online royalty rates while providing DSPs with flexibility in their consumer pricing models. 
[Information  on Sony/ATV’s licensing terms] . 
36  The correlation coefficient (a valu e between -1 and +1) measures how strongly two variables are 
related to each other. A correlation coefficient of 92% indicates a very strong positive correlation, i.e. 
i.e. minima tend to increase when purchasing power increases.  
37  See Questionnaire Q1 t o competitors, question 11.  
38  See Questionnaire Q2 to online customers, question 11.  
12 distinction in this respect between mainly E astern European countries  and to 
some extent Southern European countries versus North -Western countries .39  
(54) DSPs also confirm ed that, for a given licensor, the key terms and conditions do 
not differ significantly from one Member State to the other , with the exception 
of minima .40  
(55) The market investigation aimed at verify ing Sony's argument (and the evidence 
it submitted) according to which  the only term that varies significantly from one 
Member State to the other is the minimum royalty, and that variations in the 
minima are driven by differences in downstream DSP pricing across Member 
States to reflect differing l evels of consumer p urchasing power, rather than by  
different levels of market concentration  of publishers  and market shares. The 
Commission therefore requested  music publishers to provide their market share 
and details over the headline royalty rate and mi nima applied in each EEA 
member state with the major online platforms. Their responses confirm that, f or 
a given DSP  and licensor , headline royalty rates do not vary across Member 
States (with only few exceptions)  whereas minima per subscriber (for stream ing 
services platform)  typically vary between different Member States . However, no 
relationship was found between contractual minima and revenue shares in a 
given Member State.  Instead, as claimed by Sony, variations in the contractual 
minima seem to be dr iven by differences in downstream DSP pricing across 
Member States to reflect differing levels of consumer purchasing power, as 
minima per subscriber (for various streaming services) strongly correlate with 
price levels, as measured by Eurostat 2017 price level index for household final 
consumption expenditure.41  
(56) Finally, Sony/ATV & EMI MP's competitors who negotiate online licenses 
directly with DSPs confirmed that advances do not vary across Member States, 
instead there is a single advance covering the pa n-European license. They also 
confirmed that the Anglo -American repertoire and the service description 
licensed to a DSP is similar across all EEA Member States, and that other usage 
terms, such as the grant of rights enabling the licensee to offer free tr ials, family 
or student subscriptions, and/or  promotional discounts at discounted royalties, 
apply uniformly across all EEA Member  States .42 
(57) Given the above considerations, the Commission takes the view that the market 
for licensing of online rights is EEA wide.  
6. COMPETITIVE ASSESSMEN T 
(58) In assessing the competitive effects of a proposed concentration, the 
Commission compares the competitive conditions that would result from the 
notified merger with the conditions that would have prevailed without the 
                                                 
39  See Questionnaire Q1 to competitors, questions 13.1 and 13.2.  
40  See Questionnaire Q2 to online customers, questions 13 -16. 
41  See Questionnaire Q1 to competitors, que stions 14 -15. Price level indices were sourced from data 
sourced from: http://ec.europa.eu/eurostat/statistics -
explained/index.php/Comparative price levels of consumer goods and services#Overall price lev
els  
42  See Questionnaire Q1 to competitors, questions 16 -18 
13 merger. T he competitive conditions existing at the time of the merger usually 
constitute the relevant comparison for evaluating the likely effects of a merger.43 
(59) In the case at hand, in line with the analytical framework developed in previous 
cases concerning the mu sic publishing sector and, in particular, 
Sony/Mubadala/EMI  and Sony/Sony -ATV, and following the concerns raised by 
some respondents, the Commission focused its investigation primarily on 
whether the Transaction (and, in particular, the elimination of Mubadala as a 
jointly controlling shareholder of EMI MP) may lead to increased market power 
for Sony in the market for the exploitation of online rights  relating to the Anglo -
American reper toire. The Commission also assessed  the possible impact of the 
change from joint to sole control on the other relevant markets , i.e. the market 
for the provision of music publishing services to authors, as well as the various 
markets for the exploitation o f different categories of publishing rights offline . 
The Commission also investigated a number of markets that would technically 
be affected by the Transaction with a view to assessing whether the Transaction 
would lead to an increased ability and/or incen tive on the part of Sony to engage 
in input foreclosure in relation to certain Sony/ATV’s publishing rights. These 
are explained below in sections 6.1, 6.2 and 6.3, respectively.  
6.1. Horizontal effects on the m arket for the exploitation of online rights  
6.1.1.  The me rger specific concern in view of the Commission's precedents  
(60) In relation to online rights, the potential concern which the Commission 
investigated is whether the  Transaction would increase the merged entity's 
bargaining position vis -à-vis DSPs, in a way th at Sony would be able to increase 
its price or otherwise worsen its licensing terms.  
(61) In Universal/BMG , the Commission considered  that publishers with a large 
repertoire may exercise bargaining power on online music platforms and impose 
higher rates or oth er unfavourable terms and conditions by threatening not to 
license music rights to online platforms. In its following decisions  
(Sony/Mubadala/EMI  and Sony/Sony -ATV), the Commission continued to assess 
the impact of transactions in this framework.44   
(62) In the context of the  Transaction , one should recall that Sony has exercised joint 
control over EMI MP, and Sony/ATV has administered EMI MP’s catalogue 
under an Administration Agreement. As a result, EMI MP has had no 
independent role in licensing its repertoi re (or in signing and retaining authors) 
with DSPs. Instead, Sony/ATV has negotiated “blanket” licences of Sony/ATV 
and EMI MP content and has represented Sony/ATV and EMI repertoire in 
direct negotiations with DSPs  as if Sony/ATV and EMI MP were one company. 
Therefore, taking music publishing rights on a standalone basis, the Transaction 
will have no effect on Sony/ATV’s negotiation of online licenses with DSPs, as 
the size of its music publishing repertoire does no t increase with the 
Transaction.  
                                                 
43  Guidelines on the assessment of horizontal mergers under th e Council Regulation on the control of 
concentrations between undertakings, OJ C 31, 05.02.2004, p. 5 -18, paragraph 9.  
44  See e.g. Universal/BMG , recital 251. Sony/Mubadala/EMI, recital 173 and Sony/Sony -ATV, recital 70.  
14 (63) Accordingly, the Transaction will also not increase Sony/ATV’s and EMI MP’s 
combined EEA share of online music publishing revenues, which amounted to 
around 25% in 2017 (see Table 1). 
Table 1: Estimated EEA online music publishing rights revenues and market shares  
Competitor  2015  2016  2017  
Value 
(€’000)  Share  Value 
(€’000)  Share  Value 
(€’000)  Share  
Sony/ATV  […] [10-20]%  […] [10-20]%  […] [10-20]%  
EMI MP  […] [10-20]%  […] [10-20]%  […] [10-20]%  
Combined  […] [20-30]%  […] [20-30]%  […] [20-30]%  
Universal  […] [20-30]%  […] [20-30]%  […] [20-30]%  
Warner/Chappell  […] [10-20]%  […] [10-20]%  […] [10-20]%  
BMG  […] [5-10]%  […] [5-10]%  […] [5-10]%  
Concord (formerly 
Imagem)  […] [0-5]% […] [0-5]% […] [0-5]% 
Kobalt  […] [5-10]%  […] [0-5]% […] [0-5]% 
Peer […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [20-30]%  […] [20-30]%  […] [20-30]%  
Total  […] 100%  […] 100%  […] 100%  
Source: Sony/ATV estimates  
(64) However, several of Sony's music publishing competitors complained that 
changing Sony's control over EMI MP from joint to sole control will 
significantly increase Sony's bargaining position vis -à-vis DSPs. They argue that 
the move from joint to sole contro l enables Sony to leverage across both its 
recording music rights (Sony Music) and music publishing rights (Sony/ATV 
and EMI MP) when negotiating with DSPs . 
(65) As explained above (see recital (14)), in the market for the exploitation of online 
rights, the online customers need a licence not only for publishing rights but also 
for recording rights .45 In order to offer a title in its service, an online mus ic 
provider must acquire licences not only for all co -publishing rights but also for 
recording rights relating to this title.  
(66) As Sony and other major publishers also have a recording business, recording 
rights may also increase their bargaining  power vis-à-vis DSPs to the exten t that 
the recording rights expand the list of songs over which the publisher has 
control . And this is the case in practice.  Integrated music compan ies – i.e. 
having both a music publishing and a recorded music divisions  – usuall y have  
recording and publishing rights cover ing different  musical works  with only 
partial overlaps. Indeed, i t happens very often that  for a specific song a  publisher 
holds (part of) the publishing rights over that song whereas a totally independent 
record  label holds  the recording rights.  
(67) Publishers who also have a recording business have control over a larger set of 
songs for which they can threaten not to license music publishing rights and/or 
recording rights to online platforms (hold up). This may inc rease their 
                                                 
45  In the music industry publishing  rights represent the rights to the melody and the lyrics and are 
transferred from the authors to publishers. Recording rights represent rights to the particular recorded 
rendition of a song and are transferred by the recording artists to record labels.  
15 bargaining power vis -à-vis DSPs . In this case, the revenue shares from 
publishing may significantly understate the real market power of the music 
company.   
(68) In the case at hand, the repertoire of songs over which Sony has publishing 
rights only partially overlaps with the repertoire of songs over which it holds 
recording rights. More specifically, based on the unweighted aggregated weekly 
charts control shares at an EEA -level (see section 6.1.3.3 below), Sony has no 
publishing rights over […]% of  the songs over which it has recording rights. 
Only these songs potentially provide Sony with additional leverage vis -à-vis 
DSPs. 
(69) Moreover, in many cases several authors under contract with different 
publishers write a song together, which leads to split c opyrights (co -publishing) 
among publishers. Each author owns a share of the song and each publisher 
administers the shares of the author under contract. As, in order to offer the 
song, an online music provider needs to have a licence for all fractional 
publishing rights, each publisher can veto the inclusion of the song in the online 
platform's service. In this sense having a fractional ownership rights gives a 
publisher full control over the songs to which these rights relate, and thus over a 
share of the (Anglo -American) repertoire, yet on a revenue basis the publisher 
receives only the fraction of the licence fees related to the songs and as a result 
its market power would be underestimated on a revenue share basis.   
(70) In line with previous cases ( Sony/Sony -ATV and Sony/Mubadala/EMI ), the 
Commission, therefore, considers that market shares on the basis of revenues 
alone might not fully reflect the market positions of the different publishers 
since they do not adequately take into account their power on the basis of co -
publishing and reco rding rights.  
(71) To adequately reflect these factors and to give a better measure of the publishers' 
or integrated music company's market power, the Commission developed the 
concept of "control shares". A music publisher 's control share is the share of all 
songs made available for streaming or downloading by DSPs  that that music 
publisher  controls through fractional or full publishing rights or even recording 
rights  in the case of an integrated music company . For the publishing rights, 
Sony/ATV only has contr ol over the pricing negotiation with DSPs of the tracks 
that form part of the Anglo -American repertoire of Sony/ATV and EMI MP, 
since the rights over the tracks that form part of the Continental European 
repertoire are licensed by national collecting socie ties on a national or multi -
territorial basis with no control by Sony/ATV or EMI MP. In contrast, for 
recording rights, Sony Music is in charge of licensing all tracks where the 
recorded rights are held by Sony Music, irrespective of whether the track is  part 
of the Anglo -American or Continental European repertoire.  
(72) In Sony/Mubadala/EMI , the Commission considered that Sony would be able to 
negotiate with DSPs by leveraging across both of its music publishing 
catalogues (Sony/ATV and EMI MP), as the Commissi on considered that the 
interests  of Mubadala and Sony would be aligned  as regards maximising 
publishing revenues . The Commission therefore calculated the combined control 
shares of Sony/ATV and EMI MP. In contrast, t he Commission  considered that 
Sony would  not be able to leverage the strength of both its publishing 
(Sony/ATV and EMI MP) and recording  (Sony Music)  repertoires in the 
16 negotiations with DSPs  to obtain the best overall deal possible  because of the 
ownership structure of Sony/ATV and EMI MP. As b oth would be partly 
controlled by an independent entity  (Mubadala for EMI MP and the Michael 
Jackson Estate for Sony/ATV)  and as the Commission considered that 
maximising combined revenues of publishing and recording would involve a 
sacrifice on the publis hing side  for the benefits of the recording interests ,46 the 
Commission concluded that it was unlikely that the merged entity would engage 
in joint negotiations of recording and publishing rights to optimise its bargaining 
power. The Commission therefore di d not add the control shares of Sony 
Music.47 
(73) In Sony/Sony -ATV, the Commission  considered that post -transaction Sony 
would be able to leverage either across Sony/ATV and EMI MP  (as it was 
already the case before the transaction)  or across Sony/ATV and Sony Music  – 
as a result of the transaction Sony/ATV would become fully controlled by Sony, 
as was Sony Music already, making it possible to adopt a strategy maximising 
combined profits . Control shares were therefore combined 2 by 2 , and the 
increment caused by the transaction was the increased control share when 
comparing the combined control shares of Sony/ATV and Sony Music with the 
combined control shares of Sony/ATV and EMI MP. Again , the Commission  
considered that Sony would no t be able to leverage across the three divisions , as 
Mubadala's interest was only to maximise publishing revenues, and  Mubadala 
would have disagreed with a strategy to maximise combined revenues . 
(74) With the Transaction, the constraint imposed by Mubadala  will disappear.  This 
implies that, in view of the Commission's precedents, the Transaction has the 
potential to enable Sony to leverage its publishing rights of both Sony/ATV and 
EMI MP together with its recorded music rights (Sony Music) to increase its 
bargaining power vis -à-vis DSPs.  However, to the extent that the increased 
bargaining power of Sony would be used to extract better terms both on the 
recording and the publishing side, this would already have been possible pre -
merger, as this would have benefi tted Mubadala (the investment company 
having joined control over EMI MP with Sony), which would therefore not have 
vetoed such strategy.  
(75) Therefore the only merger specific concern in view of the Commission's  
precedents is that the Transaction may enable S ony to sacrifice music publishing 
revenues to achieve higher revenues in recorded music, and overall. If this 
concern is confirmed the Commission would have to assess the increase in 
Sony's bargaining power vis -à-vis DSPs  by analysing the increase in Sony' s 
control shares caused by the addition of EMI MP's Anglo -American repertoire 
to the combined control shares of Sony/ATV and Sony Music.  
(76) Furthermore, according to  one of the complainants ( Impala , an association of 
independent music companies) , the Transaction will also enable Sony to 
negotiate more guaranteed places on playlists. In particular, Impala explained 
that a music company with a greater control share is able to get its songs more 
prominently positioned in the important playlists (such as Spotify's "New Music 
                                                 
46  This was because Sony keeps a larger share of the recording revenues, as compared to publishing 
revenues. See Sony/Mubadala/EMI , footnote 99.  
47  See Sony/Mubadala/EMI , recitals 204 -2011.   
17 Friday") of streaming services than what the strength of the represented 
catalogue would justify. As playlists  enable labels and publishers to push their 
repertoire to consumers, the concern is that the Transaction would enable So ny 
to get a disproportional share of promotion through playlists, to the detriment of 
its competitors.48 
(77) Finally, for the sake of completeness, the Commission looked at potential 
coordinated effects, even if the Commission considers that there is no reason 
whatsoever to expect the Transaction to give rise to coordinated effects concerns 
in the licensing of online rights in the EEA, and no third parties ever raised the 
issue.  
6.1.2.  Notifying Party's view  
6.1.2.1.  The Transaction will not affect the size or quality of the re pertoire licensed by 
Sony/ATV nor its market share in music publishing . 
(78) The Notifying Party argues that Sony has exercised joint control over EMI MP 
and Sony/ATV has administered EMI MP’s catalogue and licensed it 
exclusively since 2012, so the Transaction  will not affect the size or quality of 
the portfolio of music rights that Sony/ATV licenses today. As a practical 
matter, since 2012 EMI MP has had no independent A rtists and Repertoire 
("A&R") ,49 creative, or operational personnel, and maintains only a sk eleton 
team of dedicated personnel whose principal function is to oversee the interests 
of EMI MP and its investors.  
(79) Therefore the Transaction does not involve any increment in market shares, and 
the combined EEA market share of Sony/ATV and EMI MP of onli ne revenues 
is below 30 %, namely [around 25] %. 
6.1.2.2.  The hold up theory postulated in Universal/BMG is not applicable . 
(80) The Notifying  Party notes that the Commission's theory of harm in 
Universal/BMG  postulates a hold -up scenario, in which publishers with a large 
repertoire exercise pressure on online music platforms and impose higher rates 
by threatening not to license their repertoire. In the Notifying Party's view, this 
premise is inconsistent with publishers' incentives because publishers are under 
pressure to license their repertoire as widely as possible due to a number of 
constraints.50 
(81) First, the ability to maximize licensing revenues as widely as possible is a 
central element of competition for  authors. Any failure to license publishing 
rights for online dissemination would adversely affect a publisher’s competitive 
position and their ability to retain existing authors and compete for new talent.  
Not licensing important DSPs would result in sign ificant losses for publishers and 
authors. And a “hold -up” strategy would not be rational with respect to smaller 
                                                 
48  See Minutes of the meeting with Impala of 30 August 2018, Final Impala submission of 25 July 2018, 
and Impala supplementary submission of 15 October 2018.  
49  Artists and repertoire (A&R) is the division of a music publishing company (or recorded music 
company) with responsibility for talent scouting and overseeing the artistic and commercial 
development of authors. It also acts as a liaison between authors and the music publishing company.  
50  Form CO, chapter 6, paragraphs 7.10 – 7.15.  
18 DSPs, because it would not lead to any material financial advantage and would go 
against the interest music publishers have in ensuring that d ownstream competition 
between DSPs is as effective as possible. 51   
(82) Second, right holders and platforms remain under pressure from piracy. 
According to the Notifying Party, the success of online streaming in (partially) 
combatting unauthorized use of music  is evidence of the disciplining effect piracy 
has in licensing negotiations, and the pressure to make authorized music readily 
available. The risk of piracy is particularly pronounced where music is only made 
available on a limited number of DSPs, as woul d be the case in any hypothetical 
“hold -up”. Music companies therefore face a constant pressure to license their 
music broadly (and resist both exclusives and “hold -ups”). 52 
(83) Third, online platforms enjoy significant buyer power which is inconsistent with 
the hold up theory.53 Since the Commission’s review of the Sony/Sony -ATV case in 
2016, DSPs have continued to become more powerful as online revenues have 
assumed still greater significance for music companies and DSPs have continued to 
consolidate. Accordingly, as explained below, the largest platforms enjoy 
significant buyer power, while music publishers have a strong incentive to 
encourage the growth of the smaller platforms.  
(84) Music companies rely on DSPs for the largest part of their revenues. Around […]% 
of Sony/ATV’s and EMI MP’s total 2017 music publishing revenues (and a round 
[…]% of Sony Music’s total 2017 recorded music revenues) were generated from 
DSPs. These revenues are predominantly generated through the larger DSPs. The 
three largest DSPs (Spotify, Google and Apple) represented c. […]% of 
Sony/ATV’s and EMI MP’s o nline licensing revenue s.54 
(85) Any “hold -up” of rights would directly and immediately impact music 
companies’ principal source of revenue; they would sacrifice those revenues for 
the company’s entire catalogue (for instance, a “hold -up” of rights for three 
months would mean the loss of one -quarter of a year’s revenues). It is highly 
unlikely that revenues foregone could be recouped. On the other hand, many 
platform operators, including both large and smaller platforms, are active in other 
areas and use music in  large part as a means of promoting other areas of their 
business ( e.g., Apple, Amazon, Facebook, and Google). Online music is therefore 
not an essential element for these platforms, which can credibly threaten to walk 
away —or (continue to) operate on an u nlicensed basis55—if the terms proposed by 
a publisher during contractual renegotiations are unacceptable to them.56 
(86) At the same time, the Notifying Party claims that music companies have a 
strong incentive to encourage competition among DSPs and to nurture entry 
from, and the growth of, smaller DSPs, so as to foster the continued growth of 
online distribution revenues and to avoid becoming dependent on only a handful 
of DSPs. They would have very little to gain by negotiating higher royalties 
from smaller DS Ps (since they generate relatively little traffic and revenue), 
                                                 
51  Form CO, chapter 6, paragraphs 7.16 – 7.21.  
52   Form CO, chapter 6, paragraphs 7.2 2 – 7.24.  
53  Form CO, chapter 6, paragraphs 7.25 – 7.57.  
54  Form CO, chapter 6, paragraph 7.26.  
55  [Information on Sony/ATV’s licensing practices] . 
56  Form CO, chapter 6, paragraphs 7.27 – 7.28.  
19 while in doing so would undermine these platforms’ competitiveness against 
larger rivals, impeding the development of the online music industry on which 
music companies increasingly rely.57  
(87) In addition, the Notifying Party claims that online platforms would not suffer 
much from a hold -up strategy, as they can and do launch their services without 
clearing music publishing rights. Typically, online platforms approach recorded 
music companies for a licence and, once they have cleared the recorded music 
rights, seek to launch their services as soon as possible. Platforms may then seek 
to regularize their position vis -à-vis music publishers retroactively. The 
Notifying Party lists a number of digital  platforms [examples of digital 
platforms that operated for an initial period without a music publishing license 
in the past ]. 58  
(88) [Information on  Sony/ATV’s licensing practices ]. 
6.1.2.3.  Sony would not have the ability and incentive to hold-up rights to the benefit of 
the recorded music division and to the detriment of publishing rights  
(89) The Notifying Party explains that if the concern is that Sony would leverage 
across recording and publishing rights to negotiate joint agreements that would 
be to the benefit of both music publishing and recorded music revenues, Sony 
would already have had an incentive to do this. Mubadala would also have had 
no reason to object to any such strategy, since it would have resulted in better 
commercial terms for EMI MP’s repertoir e. Any “leveraging” to the benefit of 
both sets of rights (and thus to both authors and artists) would therefore be 
possible today. The Notifying Party claims that the Transaction will not change 
anything in this regard.59  
(90) If instead, the concern is that Sony would sacrifice music publishing revenues 
for the benefit of increased recorded music revenues , the Notifying Party claims 
that Sony would have neither the ability nor the incentive to engage in such a 
strategy.60  
(91) First, any attempt to engage in a “hol d-up” of recorded music and music 
publishing rights to the detriment of Sony/ATV’s and EMI MP’s authors would 
be subject to a veto from the collecting societies , which  control the Anglo -
American online performance rights that are licensed together with the matching 
mechanical rights (controlled and supplied by Sony/ATV and EMI MP) licensed 
by Sony/ATV .61 Their interest lies  in maximising revenues from performance 
                                                 
57  Form CO, chapter 6, paragraphs 7.29 – 7.35.  
58  [Informatio n on Sony/ATV’s licensing practices ]. 
59  See Form CO, chapter 6, paragraph 7.79.  
60  See Form CO, chapter 6, paragraph 7.79.  
61  The pan European licensing of Sony/ATV’s and EMI MP’s Anglo -American repertoire comprises 
both the mechanical rights (controlled and supplied by Sony/ATV and EMI MP) and the matching 
performance rights (controlled and supplied by the relevant national collecting societies through 
SOLAR). The licences are administered by SOLAR, a multi -territorial licensing vehicle, which is a 
wholly  owned subsidiary of PRS and GEMA (the UK and German collecting societies) and 
administered by ICE (a wholly owned subsidiary of  PRS, GEMA and STIM (Swedish collecting 
society). While Sony/ATV and EMI MP (along with other publishers) have withdrawn their Anglo -
American mechanical rights from collecting societies, national collecting societies control Anglo -
American online performance rights. These collecting societies can (and would) exercise a veto right 
 
20 rights but also indirectly from mechanical rights, as  authors are also direct 
members of perform ance right societies. Thus, they would oppose any attempt 
by Sony to shift value from publishing to recorded music, and they have veto 
authority, which means that Sony lacks any ability to do this.62 
(92) Second, any increase in revenues from recording rights to  the detriment of music 
publishing rights would be to the detriment of most of Sony/ATV’s and EMI 
MP’s authors, as […]% of Sony/ATV and EMI MP’s authors are singer -
songwriters that have recorded music contracts with Sony Music. Acting 
contrary to the interests of a large portion of its talent base would ruin Sony’s 
reputation with its authors and/or artists, rendering Sony uncompetitive against 
other music companies and destroying the value of its business, as well as 
exposing Sony/ATV to potential cla ims from affected authors in relation to any 
damage they may have suffered, undermining Sony/ATV’s ability to compete 
for new talent .  
(93) Third, in any event, there are practical complications that inhibit the joint 
negotiation of music publishing and recorde d music rights. In Sony/ATV’s 
experience, DSPs do not typically approach recorded music and music 
publishing companies for licences to their repertoire at the same point in time or 
(even) seek to negotiate publishing licences for different geographic regio ns at 
the same time. Recorded music and music publishing negotiations are taking 
place  at different times and the length, signature, and expiry dates of their 
respective agreements vary considerably. It would be difficult to re -align the 
contractual timing s of publishing and recording rights.  
6.1.2.4.  Combined control shares are too low to raise concerns  
(94) In any event, even assuming that the Transaction will enable Sony to leverage 
across all of its rights to increase its bargaining power, the Notifying Party 
argues that the combined control shares are too low to raise concerns . More 
specifically, even if the Commission were to rely on “control shares” that combined 
rights of Sony Music, Sony/ATV and EMI MP, the resulting combined “control 
shares” would be below 50%. This would be too low to raise competition concerns 
even when compared to the control share level , at which in its previous decisions, 
the Com mission  identified competition concerns.63 
                                                                                                                                                 
over any music publishing agreement negotiated by S ony/ATV that did not represent the best interests 
of the collecting societies’ authors. See Form CO, chapter 6, paragraph 7.73.  
62  See further submission by Sony of 12 October 2018, to confirm the explanations provided by 
Sony/ATV on a conference call held  on 11 October 2018.  
63  By their nature, control shares add up to much more than 100 % because often several publishers hold 
fractional publishing rights over the same song and the recording rights and publishing rights over a 
song are often controlled by different integrated companies. As a result, in Universal/BMG , the 
Commission considered in a cautious approach " that the merger would have a significant impact in 
those markets where the merged entity would reach or exceed a control share of 50% ". See 
Universal/BMG , recital 305.  In Sony/Mubadala/EMI, the Commission found that "[ t]he only countries 
in which the Parties' control share would exceed 50% would be the UK and Ireland".  See 
Sony/Mubadala/EMI , recital 198.  In Sony/Sony -ATV, the Commission found tha t as it considered the 
relevant market to be EEA wide, " the control shares remain below 50 % and therefore does not give 
rise to competition concerns even when aggregating the repertoires of each of Sony/ATV, EMI MP and 
Sony Music ". See Sony/Sony -ATV, reci tal 142.  
21 6.1.2.5.  The Transaction will not increase Sony's ability to influence DSP playli sts 
(95) The Notifying Party argues that the Transaction will have no effect on Sony 
Music’s and Sony/ATV’s efforts to promote music publishing and recorded 
music repertoire on DSP playlists.  
(96) First, the incentive of Sony Music and Sony/ATV to promote their repertoire for 
inclusion on DSP playlists will be unchanged by the Transaction. In particular, 
Sony/ATV has every incentive to promote its own authors today, and 
Mubadala’s interest is exactly the same.  64 
(97) Second, it is unclear how Sony Music and Sony/ATV c ould coordinate their 
promotional activities as regards the majority of their respective catalogue. In 
promoting Sony/ATV authors, Sony/ATV necessarily promotes songs released 
by rival recorded music companies. Correspondingly, in promoting Sony Music 
artists, Sony Music necessarily promotes songs composed by writers signed to 
rival music. It would therefore be difficult for Sony, first, to devise a successful 
way to coordinate in the promotion of Sony/ATV & EMI MP and Sony Music 
respective repertoires, and , second, any such attempt would damage each Sony 
company’s relationships with the great majority of authors and artists who were 
not signed to both companies. Only with respect to music in which Sony Music 
holds the recorded music rights and Sony/ATV/EMI MP hold the music 
publishing rights, could Sony Music and Sony/ATV coordinate their 
promotional activities. However, even with respect to those songs, the 
Transaction will not change Sony's incentive and ability to coordinate across 
Sony Music and Sony/ATV /EMI MP, as for these songs Mubadala's interest is 
already aligned with Sony Music's interest .65  
(98) Third, the Notifying Party argues that, even if Sony Music and Sony/ATV were 
to combine their efforts after the Transaction, there is no reason why a single 
interlocutor representing both companies would be better able to influence DSP 
editorial teams than separate teams can today. In particular, the Notifying Party 
argues that there is no relationship between control share or market share and 
the ability to i nfluence a given DSP's playlists. In fact, Sony estimates that it 
recorded or distributed [information on the representation of Sony Music tracks 
on DSP playlists]. For example, in the U.K. version of Spotify’s “New Music 
Friday” playlist, which is an impo rtant promotional platform with over 2.5 
million followers, on September 7, 2018, independent labels accounted for [30 -
40]% of the playlist’s tracks [information on the representation of Sony Music 
tracks on DSP playlists ]. 
(99) Finally, irrespective of the Tra nsaction, music companies do not seem to have 
the ability, at least contractually, to influence playlist placement since DSPs’ 
editorial teams are free to include whatever repertoire they want, and make their 
own decisions. [Information on the licensing te rms of Sony/ATV and Sony 
Music]. Instead, interactions between music companies and DSPs with regard to 
                                                 
64  Form CO, chapter 6, paragraph 7.100.  
65  Form CO, chapter 6, paragraph 7.97.  
22 playlists are rather a form of “lobbying” through which a music company seeks 
to influence playlist selection .66 
6.1.3.  Commission's assessment  
(100)  The Commission ag rees with the Notifying Party's argument that the 
Transaction will not affect the size or quality of the repertoire licensed by 
Sony/ATV nor its market share in music publishing.  
(101)  However, as explained above, the Transaction may have the potential to enable  
Sony to leverage its publishing rights of both Sony/ATV and EMI MP together 
with its recorded music rights (Sony Music) to increase its bargaining power 
vis-à-vis DSPs , to the extent that it would involve sacrificing music publishing 
revenues to achieve h igher revenues in recorded music, and overall.  
6.1.3.1.  Applicability of t he hold-up theory  
(102)  In Universal/BMG , the Commission developed a “hold up” theory to assess the 
bargaining power of music publishers over online music platforms. This theory 
postulates what is in effect a “hold -up” scenario in which publishers with a large 
repertoire may exercise “pressure” on online music platforms and “impose 
higher rates” by threatening to withhold licensing rights, potentially across the 
recorded music and music publishing r ights held under single ownership by an 
“integrated” music company.67 
(103)  In Sony/Sony -ATV , the Commission considered that the pressure from piracy or 
alleged buyer power would not be sufficiently constraining for publishers not to 
engage in a hold -up strategy.  
(104)  The Commission considers that there are not compelling reasons to depart from 
this view.68 
(105)  That said, by way of background, the Commission notes the following.  
(106)  First,  online platforms and all competitors responding to the market 
investigation indicated tha t negotiations for publishing and recording rights are 
conducted separately .69 
(107)  Second , Sony claims that , to date,  it never  coordinated its negotiations of 
recorded music and music publishing licences ,70 which is also not disputed by 
online  platforms respondi ng to the market investigation . A majority of online 
platforms responding to the market investigation even noted that Sony would 
not leverage its publishing rights of both Sony/ATV and EMI MP together with 
its recorded music rights to extract better  terms from them.71 This, in turn, 
indicates that Sony , up until today, even if it could already leverage recorded 
                                                 
66  Form CO, chapter 6, paragraphs 7.90, 7.93, 7.94 and 7.100.  
67  Universal/BMG , paragraph 251.  
68  Sony/Sony -ATV, paragraphs 110 -111 
69  See replies to Questionnaire to o nline customers, question 21; and to Questionnaire to competitors, 
question 23.  
70  See for instance Form CO, Chapter 6, paragraph 7.66.  
71  See replies to Questionnaire to online customers, question 29  
23 and publishing rights to extract better terms both on the recording and the 
publishing side  (since Mubadala would have had no reasons to oppos e such a 
strategy), it has not done so . 
(108)  However , as explained, theoretically  the Transaction may enable Sony to 
sacrifice music publishing revenues to achieve higher revenues in recorded 
music, and overall.  This merger specific concern is assessed in the n ext section . 
6.1.3.2.  Applicability of the merger specific concern that Sony would sacrifice music 
publishing revenues to achieve higher revenues in recorded music  
(109)  The Commission considers it very unlikely that Sony would engage in a  strategy 
of leveraging recorde d music and music publishing rights to extract overall 
better terms from DSPs to the detriment of music publishing revenues . 
(110)  First, as regards Sony's ability to engage in such strategy, the Notifying Party 
argued that Sony would not have the ability to engage in such strategy as  any 
attempt to engage in a “hold -up” of recorded music and music publishing rights 
to the detriment of Sony/ATV’s and EMI MP’s authors would be subject to a 
veto from the collecting societies . The market investigation indicated t he 
following:  
– An overwhelming majority of collecting societies responding to the 
market investigation confirmed that Sony/ATV (directly or through 
SOLAR)72 negotiates licensing agreements with DSPs covering the 
Anglo -American mechanical rights controlled b y Sony/ATV and 
EMI MP, together with the corresponding Anglo -American 
performance rights controlled/administered by collecting 
societies.73 Dissemination of online content involves both an act of 
reproduction and an act of making available and, therefore, 
implicates both mechanical rights (i.e. the rights to make copies of 
the protected work) and performance rights (i.e. the rights to make 
the protected work available or to communicate it to the public).  
                                                 
72  SOLAR is a multi -territorial licensing vehicle, whol ly owned by PRS (the U.K. collecting society) and 
GEMA (the German collecting society). Sony/ATV appointed SOLAR to administer its and EMI MP's 
mechanical rights for the online dissemination of Anglo -American repertoire. [Information on 
Sony/ATV’s licensin g strategy.] See Form CO, chapter 6, paragraph 6.17 . 
73  See replies to Questionnaire Q3 to collecting societies, question 7.  
In particular, PRS for Music explains that "Sony/ATV and EMI MP have both mandated SOLAR to 
provide copyright administration services in respect of licensing agreements which Sony/ATV 
negotiates with DSPs to include (i) the AA mechanical rights controlled by Sony/ATV and EMI MP, 
and (ii) the matching AA [Anglo -American] performing rights controlled/administered by the AA 
CMOs [C ollective Management Organisations, i.e. collecting societies]. The licensing of both the 
mechanical rights and the performing rights by Sony/ATV through SOLAR allows the DSP to agree a 
licence for the whole of the relevant musical work (by which we mean t he composition) for the DSP’s 
service through one licence. The AA performance rights are brought to SOLAR by PRS and GEMA 
by means of the agreements which PRS and GEMA have with the other AA collecting societies.  
IMRO, the Irish Music Rights Organisation, explains that "SOLAR currently obtain the IMRO 
performing rights from PRS whom, pursuant to an agreement between IMRO and PRS, can sub -
licence IMRO rights to other Option 3 special purpose vehicles provided that these SPVs comply with 
the terms of the IMRO /PRS agreement and on the basis that PRS remains liable to IMRO for all 
activities of any -sub agent"  
24 – An overwhelming majority of collecting societies respo nding to the 
market investigation confirmed that SOLAR requires prior 
approval from the Anglo -American collecting societies  to include 
their rights in the licence.74 
– The two European collecting societies controlling Anglo -American 
performance rights, IMRO (the Irish collecting society) and PRS 
for Music  (the UK collecting society) , confirmed that they have to 
approve the music publishing rights licensing agreement over the 
Anglo -American repertoire between Sony/ATV and DSPs , and that 
they could and would  veto the inclusion of their members ’ 
performing rights in such licence, if they considered that their 
members would be disadvantaged.75 
– That said, at least theoretically, Sony/ATV would still be free to 
license its relevant mechanical rights on a standalone ba sis.76 
(111)  The Commission therefore considers that collecting societies  would not allow 
Sony to reduce the value of the performing rights. They would also most likely 
oppose any attempt by Sony to reduce the value of mechanical rights , as this 
would prejudice the interests of Sony/ATV's and EMI MP's authors, who are 
also direct members of collecting societies . However, the only threat is  that they 
would withdraw their members ’ performing rights from the licencing 
agreement. Sony/ATV wou ld still at least theoretically be free to license its 
relevant mechanical rights on a standalone basis. The DSPs would then have to 
negotiate licenses for performance rights with national collecting societies. 
Hence, the Commission considers that Sony wou ld have at least the technical 
ability to engage in such strategy.  
(112)  The next question is therefore whether Sony would have the incentive  to do so . 
(113)  As regards Sony's incentive to engage in such strategy, the Commission 
considers it very unlikely that Sony wo uld have the incentive to engage in a 
strategy of leveraging recorded music and music publishing rights to extract 
overall better terms from DSPs but that would be to the detriment of music 
publishing revenues.  
(114)  Firstly, the  Commission considers that the  threat that performing societies would 
withdraw their members ’ performing rights from the licencing agreement may 
not be sufficient to discipline Sony . The Commission considered whether this 
threat (1) would be  sufficiently credible and (2) would act as a su fficient 
deterrent so that Sony would not have the incentive to engage in such a strategy 
and risk having to licence its mechanical rights on a standalone basis. The 
market investigation suggests that the threat is credible, since  respondents to the 
market investigation indicated that , in the past , collecting societies have used 
their control ove r performance rights to veto licensing agreement s for online 
rights or influence the negotiations.77 However, responses to the market 
                                                 
74  See replies to Questionnaire Q3 to collecting societies, question 8.  
75  See replies to Questionnaire Q3 to collecting societies, questions 9 -11. 
76  See replies to Questionnaire Q3 to collecting societies, questions 9 -11. 
77  See replies to Questionnaire Q2 to online customers (platforms), question 28  
25 inves tigation are not conclusive as regards the question whether this threat of 
veto would act as a sufficient deterrent.78 
(115)  Secondly, the Commission considers that the  damaging  impact such strategy 
would have on Sony's music publishing business would be such tha t Sony would 
not have the incentive to engage in such strategy. As explained by the Notifying 
Party, an y increase in revenues from recording rights to the detriment of music 
publishing rights would be to the detriment of most of Sony/ATV’s and EMI 
MP’s aut hors. The Commission considers that the dissatisfaction of authors who 
sign a contract with Sony/ATV & EMI MP to get publishing services and the 
threat of losing them would have a disciplining effect on Sony:  
– Sony/ATV estimates that […]% of its composer ag reements come 
up for renewal each year. The Commission considers that the threat 
of these authors not renew ing is credible  as once the contract has 
come to an end there is no barrier to switching, and any “hold -up” 
or reduction of royalty rates would be ev ident to Sony/ATV’s and 
EMI MP’s authors . Just for the remainder of 2018 and 2019, the 
following authors' contracts are up for renewal and could therefore 
be lost by Sony/ATV: [details of Sony/ATV’s author contracts ].79 
– For ongoing contracts, the Commission  considers that there would 
be a credible threat that authors would successfully seek 
termination of their contracts and potentially claim damages for 
breach of Sony's contractual obligation to maximise the value of 
their publishing rights. [Information on  the terms of Sony/ATV’s 
contracts with authors]. Under common law legal systems 
(including those in the U.K. and U.S.), any “hold -up” or reduction 
of royalty rates would almost certainly be claimed to be a 
repudiatory breach of contract by a significant n umber of 
Sony/ATV’s and EMI MP’s authors, who would seek to 
immediately terminate their contracts and seek damages .80 
– The Commission also considers that such strategy would 
significantly jeopardise Sony/ATV’s ability to sign (and retain) 
new talents, which are fundamental to the long -term success of a 
music publisher.  Sony/ATV seeks to sign [a significant number] of 
authors each year. By way of example, in the U.K. alone 
Sony/ATV and EMI MP have signed […] authors this year, and 
signed an average of […] new authors each year over the last five 
years. Recruiting and retaining talent is unpredictable (the revenues 
generated by new authors can be modest in the early years), but 
fundamental to the long -term success of a music publisher. As 
Sony/ATV does not know the identity of “the next Ed Sheeran” 
(who Sony/ATV signed before he achieved commercial success), it 
is vital that the business continues to sign and retain a wide variety 
of talented authors to maximise its chances of success. Any 
withdrawal of repertoir e from DSPs or reduction in royalty rates 
                                                 
78  See replies to Questionnaire Q1to competitors, questions 28 -30 
79  See Notifying Party's reply to the Com mission's information request of 4 October 2018, paragraph 1.3  
80  See Notifying Party's reply to the Commission's information request of 4 October 2018, paragraph 1.3  
26 achieved for digital exploitation in order to benefit Sony Music 
would seriously harm Sony/ATV’s reputation (further exacerbated 
through the loss of established talent), jeopardising Sony/TAV’s 
ability to sign (and  retain) new talent, thereby threatening the 
future of its business.81 
(116)  The results of the market investigation support the idea that authors would react 
negatively to such strategy.  All DSPs expressing a view on the question replied 
that the authors would react negatively. Deezer for instance considered that 
"[t]he authors would likely react negatively and organize against the company / 
strategy" . Similarly, all competitors expressing  a view on the question replied 
that authors would react negatively and potentially try to terminate the contracts. 
For instance, Kobalt Music Group indicated that "[w]e do not sacrifice 
publishing rates/advances for better rates/advances on our master cat alogue. If 
we did and they understood this writers would be rightly outraged" . Actually, 
the general view of competitors is that they would certainly not engage in a 
strategy that would sacrifice value for authors to the benefit of recorded rights.82 
(117)  The th reat of authors switching is particularly significant given the level of 
competition in the upstream market for the provision of publishing services to 
authors. As explained further in section 6.2, Sony/ATV and EMI MP's 
combined share of revenue was only [ 20-30]% in 2017 at the EEA level and in 
any event below 30% in all Member State s.  
(118)  The Notifying Party provided evidence that […] authors have actually switched 
to competitors in the recent past, although Sony/ATV never attempted to 
devalue their publishin g rights to extract better terms for the recording rights. 
Since June 2012, successful bids by rival music publishers allowed them to sign 
[a number of] authors and catalogues formerly signed to Sony/ATV and EMI 
MP. For instance, Sony/ATV and EMI MP lost [ examples of authors formerly 
signed with Sony/ATV or EMI MP ].83 
(119)  Thirdly , all DSPs and integrated music companies responding to the market 
investigation confirmed that they have never been involved in licencing 
agreements where the integrated music company a greed less favourable terms 
regarding music publishing rights of Anglo -American repertoire, in exchange 
for better terms on recording rights.84 Even those respondents to the market 
investigation, which acknowledge that a coordinated approach across recorded  
music and music publishing is possible , consider that the purpose of such 
strategy would be to maximise revenue s for both sides  and that authors would 
react negatively to a strategy exclusively aimed at increasing revenues on the 
recorded music side to th e detriment of music publishing.85  
                                                 
81  See Notifying Party's reply to the Commission's information request of 4 October 2018, paragraph 1.3  
82  See replies to Questionnaire Q2 to online customers (platforms), question 26.3; and Q1 to competitors, 
question 28.3  
83  See Annex 1(1) to the Form CO  
84  See replies to Questionnaire Q2 to online customers (platforms), question 26.4; and Q1 to competitors, 
question 28.4  
85  See reply of a respondent to Questionnaire Q1 to competitors, question 28.3  
 
27 (120)  Overall therefore, the Commission considers that , post  Transaction , Sony will 
not have the incentive  to coordinate the negotiations of its recorded and 
publishing rights to extract better terms for its recorded music division to the 
detriment of its music publishing business. As this is the only merger specific 
way in which the Transaction coul d have increased the bargaining power of 
Sony, the Commission considers that the Transaction will not increase the 
bargaining power of Sony vis -à-vis DSPs. However, for the sake of 
completeness, in the next section, the Commission will analyse the increase  in 
Sony's control shares caused by the addition of EMI MP's Anglo -American 
repertoire to the combined control shares of Sony/ATV and Sony Music.  
6.1.3.3.  Analysis of control shares  
(121)  In previous cases ( Universal/BMG , Sony/Mubadala/EMI  and Sony/Sony -ATV), 
to assess the bargaining power of music companies vis -à-vis DSPs, the 
Commission calculated so -called "control shares " (see recital (49) for a 
definition) . This was based on the idea that music publishers with only fractional 
interests in the same musical work all wield a negative veto power towards that 
work.  
(122)  Since 2007 all the major music publishers have withdrawn the online 
mechanical rights to  their Anglo -American repertoire from the traditional 
collecting society system and retained the right to license the mechanical rights 
to Anglo -American repertoire directly to users. Therefore, they have the power 
to control pricing and licensing terms wi th regard to the Anglo -American 
repertoire. On the other hand, mechanical rights for the Continental catalogue 
(as well as performance rights for Anglo -American and Continental repertoires ) 
remain under control of the collecting societies. Therefore the co ntrol share of 
Sony/ATV for instance is the share of all songs made available for streaming or 
downloading  (irrespective of whether these songs belong to the Anglo -American 
repertoire or the Continental European one) in which Sony/ATV has fractional 
or full publishing rights and that belong to  its Anglo -American repertoire.  
(123)  Sony controls the rights over three sets of catalogues: (1) the music publishing 
rights of Sony/ATV; (2) the music publishing right of EMI MP  (jointly with 
Mubadala so far) , and (3) the recording music rights of Sony Music.  
(124)  Following the removal of Mubadala , and assuming (contrary to the conclusion 
of the previous section) that the Transaction will enable and incentivise Sony to 
coordinate the negotiations of its recorded and publish ing rights to extract better 
terms for its recorded music division to the detriment of its music publishing 
business, it would be  appropriate to calculate control shares across Sony's 
recorded music and music publishing  rights .  
(125)  Accordingly,  the increase i n Sony's bargaining power vis -à-vis DSPs  could be 
analysed by calculating the increase in Sony's control shares caused by the 
addition of EMI MP's Anglo -American repertoire to the combined catalogue of 
Sony/ATV and Sony Music, as following the Sony/Sony -ATV transaction, the 
Commission considered that Sony would already be able to leverage across 
Sony/ATV and Sony Music.  
(126)  In Sony/Sony -ATV and Sony/Mubadala/EMI , control shares were measured on 
the basis of the number of titles in the weekly top 100 singles cha rt hits in which 
28 a publisher or a record label had any ownership right (whether recording or 
publishing, fractional or full). For the publishing rights, only the Anglo -
American titles were included in the control shares. The weekly digital charts 
were cons olidated over the entire year to generate a list of unique songs that 
appeared in the chart during that year  ("weekly chart unweighted control share" 
methodology) . This means that each song was only counted once, even if it 
appeared in the chart for many w eeks.  
(127)  While  disputing the control share theory, the Notifying Party nevertheless 
submitted weekly chart control share data calculated following the methodology 
used in Sony/Sony -ATV and Sony/Mubadala/EMI  (the "weekly chart unweighted 
control share" methodology) , with some improvements to address comments 
from third parties .86 In particular:  
(a) For each EEA country  with the exception of Cyprus, Liechtenstein, 
Luxembourg, and Malta,87 Sony identified the relevant weekly charts. 
Where possible, Sony relied on the official weekly digital sales charts that 
provide the largest coverage of tracks. However, not all EEA countries 
have official digital charts, and certain official charts include only a 
limited number of tracks. In these situations, Sony identified the most 
reliable “unofficial” chart.  
(b) Sony consolidated the weekly charts to generate a list of unique tracks that 
appeared in the charts during 2017 for each country.  
(c) For each chart track that appears in these lists, Sony determined whether 
authors on Sony/ATV's  and EMI MP’s roster were involved  in writing the 
track, and therefore whether the track is part of their publishing  repertoire. 
All works that were written or co -written by Sony/ATV's and EMI MP's 
authors were included, i.e. track with both full an d fractional ownership 
rights were included. Finally, for all tracks that were considered part of 
Sony/ATV's or EMI MP's repertoire, it was determined whether the track 
belongs to the Anglo -American or Continental European repertoire.88 
Only the Anglo -Ameri can titles were included in the control shares of 
Sony/ATV and EMI MP.  
(d) Control shares that take into account recorded music rights were also 
computed in a similar way as publishing control shares. Sony included all 
tracks where the recorded rights are held  by Sony Music in a given year, 
as well as third -party songs distributed by Sony Music, irrespective of 
                                                 
86  See submission of 20 July 2018 by Warner Group CORP. ( WMG) following the meeting with the case 
team of 29 June 2018; and Impala submission of 25 July 2018.  
87  These are countries where it has not been practicable to generate data. These countries account for 
[…]% of Sony’s EEA music publishing revenues, so wo uld not have a material effect on the EEA -
wide data.  
88  The same track may be considered Anglo -American and Continental European in the event that the 
track is co -authored by two (or more) authors registered with collecting societies in different countries . 
Specifically, one (or more) authors may be registered with the U.K. or U.S. collecting society. The 
work of that author is therefore considered Anglo -American. Similarly, one (or more) authors may be 
registered with a collecting society in Europe. The wo rk of that author is therefore considered 
Continental European. Sony adopted a conservative approach and treated these tracks as Anglo -
American.  
29 whether the track is considered Anglo -American or Continental European 
repertoire by Sony Music.  
(e) The “control shares” are expressed in percentage terms of the number of 
unique tracks that enter into each respective chart year. This ensures that 
the “control shares” are comparable across EEA countries. There is no 
official EEA chart, so EEA “control shares” were generated by weighting 
the national shares a ccording to total music publishing and recorded music 
market sizes.  
(128)  As compared to  Sony/Sony -ATV and Sony/Mubadala/EMI , the following 
improvements were made following suggestions made by third parties:89 
(a) More EEA countries were added to the analysis.  
(b) Third -party songs distributed by Sony Music were included in Sony 
Music's control share.  
(c) EEA “control shares” were generated by weighting the national shares 
according to not only total music publishing but also recorded music 
market sizes.  
(129)  Table 2 below presents the EEA -wide control shares of Sony/ATV, EMI MP, 
and Sony Music  on a standalone basis , as well as the combined position that 
Sony could achieve pre -Transaction and post -Transac tion, assuming (contrary to 
the conclusion in the previous section) that the Transaction will enable and 
incentivise Sony to coordinate the negotiations of all of its recorded and 
publishing rights . In particular : 
– The c ombined control share of Sony/ATV and EMI MP reflects the 
fact that following  Sony/Mubadala/EMI , the Commission 
consider ed that Sony would be able to negotiate with DSPs by 
leveraging across both of its music publishing catalogues 
(Sony/ATV and EMI MP) ; 
– The combined control share of Sony/ATV and Sony Music reflects 
the fact that following Sony/Sony -ATV, the Commission considered 
that Sony would be able to also leverage across Sony/ATV and 
Sony Music, because as a result of the transaction Sony/ATV 
became fu lly controlled by Sony, as was Sony Music already, 
making it possible to adopt a strategy maximising combined 
profits.  
– The combined control share  of Sony/ATV, EMI MP and Sony 
Music reflects  the assumption that post-Transaction (contrary to 
the conclusion reached in the previous section) Sony would  
coordinate the negotiations of all of its recorded and publishing 
rights.  
                                                 
89  See submission of 20 July 2018 by Warner Group CORP. (WMG) following the meeting with the case 
team of 29 Ju ne 2018; and Impala submission of 25 July 2018.  
30 Table 2: 2017 weekly chart control shares at the EEA level  
 Sony/ATV  EMI MP  Sony/ATV 
& EMI 
MP 
Combined  Sony 
Music  Sony/ATV 
& Sony 
Music 
Combined  Sony/ATV, 
Sony 
Music & 
EMI MP 
Combined  
Weekly  chart 
unweighted 
control share  [20-30]% [20-30]% [30-40]% [20-30]% [30-40]% [40-50]% 
Note: Combined control shares are lower than the sum of control shares because of the 
songs  for which more than one division controls rights  
(130)  As explained in the previous section, the Commission considers that the 
Transaction will not incentivise Sony to coordinate the negotiations of its 
recorded and publishing rights to extract better terms fro m DSPs. Therefore, 
controls share should not be calculated by adding EMI MP's Anglo -American 
repertoire to the combined catalogue under control of Sony/ATV and Sony 
Music, i.e. control shares should not be calculated across Sony/ATV, Sony 
Music & EMI MP. H owever, even if the Commission assumed ( which is not the 
case) that  the appropriate combined control share of Sony included the rights to 
Sony Music, Sony/ATV and EMI MP repertoires, the resulting  EEA -wide 
combined control share would be [40-50]%. 
(131)  This is below the 50 % threshold, which was set in precedents as the threshold 
for significant market power and thus competition concerns.90 Control shares 
should not be equated to  market shares. By their nature, control shares add up to 
more than 100 %  because ofte n several publishers hold fractional publishing 
rights over the same song and the recording rights and publishing rights over a 
song are often controlled by different integrated companies. As a result, in 
Universal/BMG  the Commission considered that the th reshold for increased 
market power that would have a significant (negative) impact on competition is 
a control share of 50%.91 This threshold was confirmed in Sony/Mubadala/EMI  
and in Sony/Sony -ATV.92 
(132)  As a sign that the threshold of 50% is reasonable it is w orth noting that ot her 
major publishers also have very significant control shares . Although the 
Commission does not have recent control share estimates for Universal Music, 
based on its decision in  Universal Music Group/EMI Music  and despite the 
divestment  of significant catalogues back then, Universal Music's current 
control share at an EEA level across music publishing and recording is 
estimated to be between 40% and 50%.93 
                                                 
90  See Universal/BMG , recital 305; Sony/Mubadala/EMI , recital 198; and Sony/Sony -ATV, recital 142.  
91  Universal/BMG , recital 305.  
92  Sony/Mubadala/EMI , recital 198; and Sony/Sony -ATV, recital 142.  
93  Case CO MP/M.6458 Universal Music Group/EMI Music. Commission decision of 21 Septmber 2012 
("Universal/EMI "). 
31 (133)  Furthermore, th e 50% threshold has to be considered in the light of the 
important development s in the music industry over the last ten years. Online 
music in Europe (and worldwide) has experienced significant and sustained 
growth in recent years due to the increasing popularity of streaming, a trend that 
is set to continue . Just between  2012 and 2017, the EEA market for online music 
publishing rights increased fivefold (from circa €[…] million in 2012 to more 
than €[…] million in 2017). Given these developments, a 50% control share 
today is unlikely to provide as much bargaining power to  a publisher than a 50% 
control share back in 2007 for the following reason s.  
(134)  Firstly , the growth of online music and in particular streaming services has 
lowered barriers to entry and expansion for publishers. The proliferation of 
streaming  means that ma jor record labels and publishers no longer hold the gate -
keeping role they did by virtue of their influence over offline formats such as 
radio and physical music stores.94 As a result, authors and artists are more 
willing to explore signing with smaller rec ord labels and music publishers . This 
increased competition has resulted in advances to successful authors being at an 
all-time high, narrowing royalty splits in authors’ favour, shorter contract terms 
and retention periods, and an increased prevalence of publishing contracts 
without retention periods .95 Against this background, a hold -up strategy 
whereby a publisher would threaten not to license the rights to the repertoire it 
controls becomes less credible, as the threat of un satisfied  authors switching ha s 
become much more credible, especially in the context of a strategy (as the one 
that is the focus of the control share analysis in this section) that would involve 
sacrificing publishing revenues to the benefit of recording revenues.  
(135)  Secondly, DSPs today have much more buyer power than they used to have 5 -
10 years ago. Today, music companies rely on DSPs for the largest part of their 
revenues. This was not the case 5 years ago, and even less 10 years ago. In 
2017, around […]% of Sony/ATV’s and EMI MP’s tot al 2017 music publishing 
revenues and around […]% of Sony Music’s total 2017 recorded music revenues 
were generated from DSPs. Spotify, Apple, and Google/YouTube accounted for 
more than […]% of Sony/ATV and EMI MP's EEA online licensing revenues in  
2017.96  
(136)  As regards the methodology used to calculate control shares, t hird parties 
claim ed that in addition to the improvements presented above and made to the 
control share calculation methodology, the control share calculation should also 
take into account the greater control that comes from having rights in songs that 
                                                 
94  For instance, Willard Ahdritz, CEO, Kobalt Music stated: " Because of the proliferation of streaming, 
fans have unprecedented access to their artists of  all shapes and sizes. Instead of gatekeepers deciding 
what fans should listen to, now the fans drive what they want to listen to ". See 
https://www kobaltmusic.com/blog/why -independent -artists -are-ruling -the-music -industry -according -
to-willard -ahdritz  
95  See Form CO, chapter 6, paragraph 7.19 and Chapter 1, paragraph 6.13.  
96  See Form CO, chapter 6, paragraphs 7.25 -7.26. The No tifying Party also claims that music publishers 
have strong incentives to encourage the growth of smaller DSPs and therefore not to insist on higher 
royalties from them as compared to the Spotify, Apple or Google/Youtube. This is because smaller 
DSPs can g row consumption and explore new methods of commercialising music (as exemplified by 
Spotify which launched its streaming service 10 years ago and which is now number one), and in any 
event increasing royalty rates for smaller DSPs would not allow them to g row and even possibly 
survive, as the largest DSPs currently operate at loss or very low margins. See Form CO, chapter 6, 
paragraphs 7.29 -7.35 
32 maintain high chart positions over multiple weeks. In particular, they claimed that 
songs should be weighted according to the number of weeks they stay in the 
chart.97 
(137)  In the same logic, it is reasonable to expect that the popularity of song s also 
matter s to assess the strength of a particular repertoire. A sensible measure 
which both takes into account the (instantaneous) popularity of a song and its 
longevity would be  the share that the songs controlled by a music company 
account for in the total numbe r of streams on a DSP platform , covering as many 
songs as possible . 
(138)  The Commission considers that such measure better captures the bargaining 
power of a music pub lisher than the measure proposed by third parties (see 
recital (136)  above) which continues to focus on the Top 100 charts and which 
only weights so ngs based on the number of weeks it remains in the weekly 
charts.  
(139)  Firstly, i n line with its precedents, the Commission considers that larger samples 
are preferable because they proxy better the actual control share of Sony, i.e. the 
share of the songs in DSPs' entire repertoires that Sony controls. In Sony/Sony -
ATV, the Commission recognised that control shares in weekly charts are only a 
"proxy" for actual control shares and that "[i]n principle, to calculate control 
shares it would be necessary to determ ine the controlling entities for all the 
titles". This is confirmed by the results of the market investigation . Customers 
responding to the market investigation  considered in particular that the chart 
based measure is too " hit-centric " and that a better me thod would be to use 
"each digital music service ’s usage data". 98 The alternative measure proposed 
by the Commission would be based on DSP's usage data.  
(140)  Secondly, a stream -weighted control share methodology does not only take into 
account the greater control and bargaining power that comes from having rights 
in songs that are listened to over an extended period (the number of weeks they 
remain in the charts), but also  the greater control and bargaining power that 
comes from having rights in a very popular song which everyone wants to listen 
to.  
(141)  The Commission therefore  asked the Notifying Party  to produce such measure.  
(142)  Notwithstanding its reservations about the “cont rol share theory”, the Notifying 
Party nevertheless submitted control share data based on DSP usage data. These 
data assess Sony’s recorded music and music publishing rights across the top 
75,000 most streamed songs on [a DSP]. The Commission considers tha t [the 
DSP in question] is representative of the overall online market for the following 
reasons.  First, [information on the representativeness of the sample]. Second, 
[information on the representativeness of the sample ].99 And third, there is no 
reason t o believe that Sony's control share would differ materially depending on 
                                                 
97  See submission of 20 July 2018 by Warner Group CORP. (WMG) following the meeting with the case 
team of 29 June  2018; and Impala submission of 25 July 2018.  
98  See Replies to questionnaire Q2 to online customers, question 32.1.  
99  See Form CO, chapter 6, recital 7.26.  
33 whether we look at streams on [names of several DSPs]. [Information on the 
representativeness of the sample ].  
(143)  Control shares calculated using this DSP usage data covers a much broade r 
selection of songs than the chart data -based “control shares” considered above. 
Sony has used the following methodology to generate “stream -weighted control 
shares" for the […] EEA countries in which Sony/ATV and EMI MP directly 
license their repertoire,  together accounting for [the vast majority] of 
Sony/ATV's EEA music publishing revenues : 
(a) For each of the […] EEA countries, Sony obtained the 75,000 most 
streamed songs on [a DSP] for each month of the first quarter of 2017. 
[Details of how Sony sourced t he sample in question ]. 
(b) These data identify Anglo -American repertoire tracks for which an author 
of Sony/ATV or of EMI MP was involved in writing the track, regardless 
of the publishing share held (i.e., tracks with full and fractional rights were 
included ). Only the Anglo -American titles were included in the contro l 
shares of Sony/ATV and EMI MP.  
(c) Control shares that take into account recorded music rights were also 
computed in a similar way as publishing control shares. Sony included all 
tracks where the r ecorded rights are held by Sony Music in a given year, 
as well as third -party songs distributed by Sony Music, irrespective of 
whether the track is considered Anglo -American or Continental European 
repertoire by Sony Music. [Information on the identificati on of recorded 
music rights in the sample ]. 
(d) Sony consolidated these monthly data to obtain a unique list of songs for 
each country for the first quarter of 2017.  
(e) Each track in the sample was then weighted by the number of streams 
during that period.  
(f) The “c ontrol shares” are expressed in percentage terms of the number of 
unique tracks that enter into each country DSP streaming dataset. This 
ensures that the “control shares” are comparable across EEA countries. 
The EEA “control shares” across these […] territ ories were generated by 
weighting the national shares according to total music publishing and 
recorded music market sizes . 
(144)  Table 3 below presents the EEA -wide "stream -weighted control shares" for the 
first quarter of 2017  of Sony/ATV, EMI MP, and Sony Music on a standalone 
basis, as well as the combined control share of Sony/ATV and EMI MP, the 
combined control share of Sony/ATV and Sony Music, and the combined 
control share of Sony/ATV, EMI MP and Sony Music.  
34 Table 3: Q1 2017 S tream -weighted control shares on [a DSP ] at the EEA level  
 Sony/ATV  EMI  MP Sony/ATV 
& EMI 
MP 
Combined  Sony 
Music  Sony/ATV 
& Sony 
Music 
Combined  Sony/ATV, 
Sony 
Music & 
EMI MP 
Combined  
Stream -
weighted 
Control share  [20-30]%  [10-20]% [30-40]% [30-40]% [40-50]% [40-50]% 
Note: Combined control shares are lower than the sum of control shares because of the 
songs for which more tha n one division controls rights.  
(145)  Even if the Commission assumed (which is not the case) that the appropriate 
combined control share of Sony included the rights to Sony Music, Sony/ A TV 
and EMI MP repert oires, under this improved stream -weighted control share 
methodology, the resulting EEA -wide combined control share of Sony would be 
[40-50]%. This is still below the 50 % threshold which was set in the precedents 
identified in paragraphs (93) and (130) . 
(146)  For completeness, the Commission notes that Impala also submitted to the 
Commission weekly chart control shares estimates for the UK, Ireland, France, 
Spain, the Netherlands, Sweden and Italy. The methodology used by Impala was 
to take one chart from each month of 2017 for each territory. Impala then 
averaged the weekly control shares over the 12 months. This methodology 
therefore takes into account the number of weeks songs remain in the charts.100 
(147)  In line with the Commission's precedents, Impala only included the Anglo -
American titles in the control shares of Sony/ATV and EMI MP, whereas for the 
control share of Sony Music it included  all tracks where the recorded rights are 
held by Sony Music irrespective of whether the track belongs to th e Anglo -
American or Continental European repertoire. To take into account third -party 
songs distributed by Sony Music, Impala added a net increase of control shares 
for distributed repertoire of 2%. However, instead of calculating the combined 
control shar e of Sony/ATV, EMI MP and Sony Music as the share of the songs 
controlled jointly by these entities over the entire chart list, Impala restricted the 
scope of the denominator to only Anglo -American repertoire plus the songs of 
the Continental European repe rtoire controlled by Sony Music. 101   
(148)  This methodology is inconsistent with the methodology used in the 
Commission's previous decision s where " [t]he weekly digital charts were 
consolidated to generate a list of unique tracks"  and "“ control shares” [were] 
expressed in percentage terms of the number of unique tracks that entered into 
each respective chart ".102 Hence, in previous decisions, the denominator clearly 
included all song s from the charts, not only Anglo -American repertoire plus the 
songs of the Contine ntal European repertoire controlled by Sony Music.  
                                                 
100  See Impala's submissions of 9 October 2018, 10 October 2018, 15 October 2018 and 16 October 2018.  
101  See Impala's submissions of 9 October 2018, 10 October 2018, 15 October 2018 and 16 October 2018.  
102  See Sony/Sony -ATV, paragraph 138  
35 (149)  Moreover, t his measure does not proxy the bargaining power of Sony vis -à-vis 
DSPs  (even assuming – wrongly (see previous section) – that Sony  would 
leverage across recording and publishing ). This is becau se a music publishing 
company's bargaining power vis -à-vis DSPs and therefore its market power 
depend s on how critical its catalogue of songs is for DSPs  when compared to the 
overall set of songs the DSPs aim to get access to irrespective of whether these 
songs belong to the Anglo -American repertoire or the Continental European 
one.  
(150)  It is easy to see this by considering a hypothetical country where Anglo -
American songs are  not popular. Assuming for instance that in that hypothetical 
country only 1 song of the top 100 chart belongs to the Anglo -American 
repertoire , and Sony/ATV or EMI MP holds full or fractional publishing rights 
over that song, then Impala's control share m ethodology would give a 100% 
control share to Sony (both pre - and post -Transaction), even if Sony Music  does 
not hold any other rights over the 99 other songs part of the top 100 chart. This 
does not appropriately proxy the bargaining power of Sony, as eff ectively Sony 
would only be able to threaten the DSPs to withdraw its rights in relation to 1% 
of its entire repertoire (assuming the chart is representative of the DSPs' entire 
repertoire). In this hypothetical scenario, the Commission would not consider 
even a 100% control share following Impala's methodology as potentiall y 
raising competition concerns . 
(151)  The Commission also notes that the control shares estimates submitted by 
Impala were estimated at a national level, whereas as explained above the 
relevan t geographic market for the exploitation of publishing rights for online 
use is EEA -wide.  
(152)  The Commission therefore considers that Impala's  control sha re submission , as 
it does not measure correctly the bargaining power of Sony, does not cast doubts 
on the validity of the control share analysis carried out by the Commission and 
presented above.  
6.1.3.4.  The effect of the Transaction on Sony's ability to influence DSP playlists  
(153)  The Commission considers that contrary to Impala's claim, the Transac tion will 
not enable Sony to achieve  a disproportional share of promotion through 
playlists, in a way that would foreclose competition in the  market for the 
exploitation of publishing rights for online use .103 
(154)  First, the Commission considers that, as claimed by the Notifying Par ty, 
irrespective of the Transaction, music companies seem to have limited ability to 
influence playlist placement . No music publisher or online platform questioned 
by the Commission in its market investigation disputes this claim .104 
(155)  Second, assuming that the Transaction would enable Sony Music and 
Sony/ATV to coordinate their promotional activities in a way that was not 
                                                 
103  See Minutes of the meeting with Impala of 30 August 2018, Final Impala submission of 25 July 2018, 
and Impala supplementary submission of 15 October 2018.  
104  See Universal Music Group's response to questions received from the European Commission on 31 
August 2018 in respect of the Sony/EMI transaction, as well as replies to Questionnaire Q2 to online 
customers (pl atforms) and to Questionnaire Q1 to competitors.  
36 possible before  the Transaction  (e.g. because in promoting Sony Music artists, 
Sony Music necessarily promotes songs compose d by writers signed to rival 
music publishing companies , i.e. to the detriment of Mubadala ), the 
Commission does not see  why a single interlocutor representing both companies 
would be better able to influence DSP editorial teams than separate teams can 
today.  
(156)  In particular, licencing agreements do not contain any requirements as regards 
playlist placements. Therefore a hold -up scenario,  by which publishers with a 
large repertoire would threaten not to license their repertoire in order to obtain a 
more prom inent placement on playlists, is not conceivable.  
(157)  In this respect, only two market participants – Impala and Warner – claimed that 
a music company with a greater control share is able to get its songs more 
prominently positioned in the important playlists of streaming services than 
what the strength of the represented catalogue would justify. None of them has 
been able to provide even anecdotal evidence supporting this claim.105 In 
contrast,  the Notifying Party submitted some anecdotal evidence in support of 
its claim showing that [information on the representation of Sony  Music tracks 
on DSP playlists]  and the independents over -represented in one of Spotify’s 
most important curated playlists .106 
(158)  Finally, even if the Transaction increased the ability of Sony to lobby for more 
prominent placements on DSPs playlists, the Commission considers that this 
would not have significant f oreclosure effects . To the extent that music 
companies can influence at all the songs that are available on a given DSP’s 
playlist, such i nfluence is limited to curated playlists that are prepared by DSPs' 
editorial team.  
(159)  Other playlists are prepared by industry stakeholders and users, by algorithms, 
independently based on charts for instance, or even self -selecting, all without the 
involvement of music companies . 
6.1.3.5.  Coordinated effects  
(160)  In both Universal/BMG  and Sony/Mubadala/EMI , the Commission excluded 
coordinated effects concerns in the online licensing of music publishing rights, 
inter alia , on the ground that it was unlikely that pr ices were sufficiently 
transparent for music publishers to be able to reach terms of coordination, 
monitor compliance with them and detect any deviation.107 
(161)  At the outset, the Commission notes that the Transaction will have no effect on 
whatever scope for ta cit coordination, as Sony/ATV already negotiates online 
licences on behalf of EMI MP, and has done so since 2012.  
(162)  For completeness, the Commission considers that , in any event,  the Transaction 
could not raise coordinated effects concerns in the EEA market  for the licensing 
                                                 
105  See Minutes of the meeting with Impala of 30 August 2018, Warner Music Group (WMG)’s response 
to RFI dated 31 August 2018.  
106  See Form CO, chapter 6, paragraph 7.98.  
107 Universal/BMG, paragraph 87 and Sony /Mubadala/EMI, paragraph 267.  
37 of online music publishing rights because the market is not conducive to 
collusion, for the following reasons.  
(163)  First, coordinated effects concerns in relation to the licensing of Continental 
European repertoire can be excluded, since mus ic publishers have no influence 
over the price of this repertoire.  
(164)  Second, as to the negotiation of online licenses for Anglo -American repertoire, 
there is insufficient transparency in pricing to support tacit coordination  as 
pricing and other contractual terms are negotiated confidentially.  
(165)  Third, the publishing industry is not concentrated  given the presence of 
hundreds of publishers active in this industry. Given the large number of 
publishers, any attempt at coordination would inevitably leave a large g roup of 
outsiders that would undermine any such attempt.  
(166)  Fourth, there has been significant new entry and expansion over recent years 
(including the entry and rapid growth of BMG, Kobalt, Concord, Round Hill 
Music, and others). As publishers enter and com pete to sign authors in the 
upstream market, they create new works available for online licensing and 
thereby destabili se any possible attempt at coordination.  
(167)  Fifth, there exists no plausible  retaliatory mechanism that could deter deviation. 
And even if a  mechanism existed, since licence agreements for Anglo -American 
repertoire are negotiated bilaterally and feature differing durations and 
commencement dates, coordinating firms would need to wait until their own 
agreements with DSPs had expired before reta liating on price or other 
commercial terms. Any tacit understanding could not, therefore, be policed by 
timely or effective retaliation, and would be internally unstable.  
(168)  Sixth, any attempt at coordination would be frustrated by external pressures, 
includi ng the countervailing bargaining power of DSPs suc h as Apple, Amazon, 
and Spotify . 
(169)  Finally, any attempt by integrated music companies to coordinate across their 
recorded music and music publishing businesses would be even more difficult 
due to the consider able difficulties in coordinating licensing terms between their 
respective recorded music and music publishing businesses, the absence of 
transparency in respect of the terms on which recorded music and music 
publishing terms are licensed, and the lack of any credible retaliation 
mechanism.  
6.1.3.6.  Conclusion  
(170)  For the above reasons, the  Commission concludes  that the Transaction does not 
raise  serious doubts as to its compatibility with the internal market as regards  the 
market for the exploitation of publishing rights for online use. 
(171)  Finally, given the absence of effects on this market, the Commission also 
dismisses IMPALA's concerns according to which if Sony were to be able to 
increase its revenues downstream it would then be able to offer better ter ms for 
artists, while the opposite would happen to the independents.  
38 6.2. Horizontal effects on  other markets  
Publishing services to authors  
(172)  In Sony/Mubadala/EMI , the Commission identified no concerns arising from the 
combination of Sony/ATV and EMI MP, including because of competition from 
other publishers on royalties, advances, contract terms, and retention periods.108 
In Sony/Sony -ATV, the Commission reached the same conclusion noting that 
since then, competition had remained intense.109  
(173)  The Commi ssion c onsiders that the  Transaction will have no effect on the 
market for the provision of publishing services to authors . While Sony/ATV and 
EMI MP are active in this market, the Transaction will not increase Sony's 
market share which remains unaffected by the Transaction. Since 2012 
Sony/ATV has administered EMI MP’s catalogue under an Administration 
Agreement, managing relationships with EMI MP's existing authors and signing 
agreements for new authors whose rights are co -owned by Sony/ATV and EMI 
MP. Sony/ATV and EMI MP have not competed to sign new authors  since 
2012.   
(174)  The Commission further notes that, in any event, Sony/ATV and EMI MP's 
combined market share by revenue was [20 -30]% in 2017 EEA -wide and was 
below 20% in France, Italy, Bulgaria, Estonia, Hungary, Latvia, Lithuania and 
Luxembourg. In the other EEA countries, the combined market share of  the 
Parties did not exceed 25% in Austria, Belgium, Cyprus, Iceland, Ireland, Malta, 
the Netherlands, Poland, Romania, Slovakia, Spain and Sweden. The Part ies' 
combined market share was between 25% and 30% in the Czech Republic, 
Denmark, Germany, Greece, Norway, Portugal, Slovenia, and the United 
Kingdom . 
(175)  During the market investigation certain  publishers claimed that the Transaction 
may harm authors and wea ken competitors.110 According to such complaints , 
post-merger , Sony would become financially more powerful and therefore be 
able to offer artists larger advances than its competitors , reducing competition in 
the market . Sony would also be able to obtain  better terms  for offline and online 
exploitation and therefore have a stronger position to  persuade writers to sign to 
Sony for publishing services . Sony could, according to  complain ants, also 
leverage recording and publishing rights and persuade authors to si gn for both. It 
was also  claimed that the quality of services offered to authors suffers as Sony's 
repertoire increases and Sony does not exploit the rights of all authors as before, 
while authors cannot leave their publisher. In turn, a ssociations of authors and 
composers claimed that post -merger, the quality of services provided to authors 
will deteriorate as the merged entity will merge two vast catalogues and creative 
teams and focus on the most valuable rights (i.e. the Anglo -America n 
repertoire). They also claim ed that Sony will use its market size in the allocation 
of promotional opportunities by DSPs to promote a small roster of artists, at the 
expense of cultural diversity and consumer choice, and make it more difficult 
for indepe ndent publishers to compete for such opportunities. Moreover , a 
                                                 
108  Sony/Mubadala/EMI , recital 294.  
109  Sony/Sony -ATV, paragraphs 147 and 148.  
110 See Questionnaire Q1 to competitors, question 42.1 and 43.  
39 complainant asked the Commission to carry out a “cultural diversity impact 
assessment,” arguing that the Transaction would reduce the number of authors 
on Sony/ATV’s roster and that Sony is mo re likely to focus on Anglo -American 
authors and artists.  Finally, Impala also claimed that if Sony were to be able to 
offer better terms for artists it would dynamically increase its revenues 
downstream and that, also, the market for providing publishing services to 
authors is influenced by the ability of a  publisher to secure better terms for 
exploitation and more opportunities for an author’s works.111 
(176)  These claims are addressed in the following paragraphs.  
(177)  As to the claim that post-merger, Sony would beco me financially more powerful 
and therefore be able to offer artists larger advances than its competitors , the 
Commission recalls that Sony/ATV and EMI MP have not competed to sign 
new authors since 2012. Moreover , publishers compete for successful authors on 
all commercial terms of a publishing contract (including not only advances , but 
also royalty splits and retention periods , but also the type of attention and 
commitment offered to an author ). Publishers offer different “mixes” of 
percentage rates and ad vances to attract authors. An author will consider the 
overall package when deciding among rival publishers. The Notifying Party has 
provided the example of Kobalt 's, which had  success by provid ing favourable 
percentage splits to authors.112 In addition, if anything, if Sony were able to 
offer better deals to authors, this would be good for authors and for competition, 
unless and until it is demonstrated that this may result in other types of anti -
competitive effects.  
(178)  As to the claim that the Transaction coul d potentially increase Sony's incentives 
to tie or bundle music publishing services with recorded music services to 
singer -songwriters, the Commission notes that , following the Transaction , Sony 
will benefit 100% of increments in profits of EMI MP when signing a new 
author (compared to previously when part of the profit increment would have 
had to be shared with Mubadala). However, the Commission considers, first, 
that a tying or bundling st rategy would not foreclose competitors, as the vast 
majority of tracks are not recorded by the authors of the song. A large pool of 
common customers is normally required for foreclosure to be a potential 
concern.113 Any hypothetical tying or bundling strateg y could thus only arise in 
respect of the singer -songwriter sub -set of artists and authors, leaving the majority 
of demand available for rivals. Second , post-Transaction tying or bundling  is 
unlikely to be a profitable strategy, as singer -songwriters gener ally prefer 
signing recording rights and publishing rights with different companies,114 and 
                                                 
111  Impala's claim that if Sony were to be able to increase its revenues downstream it wo uld then be able 
to offer better terms for artists is also addressed in each of the sections of this Decision dealing with 
the downstream markets, i.e. mechanical rights, performance rights, synchronization rights and print 
rights.   
112 Form CO, Chapter 1, para. 6.18. Authors receive royalties (split in the agreed proportions between the 
author and publisher) and publishers compete to offer authors more favourable percentage royalty 
splits. The lower the percentage of royalties paid to (or retained by) the p ublisher, the more attractive 
that offer will appear to the author (other things being equal).  
113 Non-Horizontal Guidelines, paragraph 100.  
114  Only a small minority of authors signed to Sony/ATV have signed recorded music contracts with Sony 
Music. Sony/ATV  manages the works of approximately […] authors, the majority of which are not 
singer -songwriters. Sony/ATV estimates that only around […]% of its and EMI MP’s authors have 
recording contracts with Sony Music. Singer -songwriters who have a publishing agree ment with 
 
40 therefore singer -songwriters would rather switch to one of the many rival music 
companies.  
(179)  As to the claim that the quality of services offered to authors would suff er, the 
Commission notes that the Transaction will have no effect on A&R115 
expenditure, as EMI MP is already commercially integrated with Sony/ATV and 
the companies’ A&R teams were combined in 2012. Moreover, even if the 
Transaction did lead Sony/ATV to red uce A&R, this could potentially  benefit 
competing  music publishers  (whether majors or independents),  as they would be 
better able to compete for and sign any authors neglected by Sony.  Moreover , 
there is no reason to believe that large music publishing com panies have less 
incentive to maximize revenues than smaller companies . The ability to 
maximize licensing revenues is a central element of competition among music 
companies for authors. Therefore, Sony will have every incentive to extract 
maximum value fro m its authors' work, since any failure to licence publishing 
rights would impair its ability to retain existing authors and compete for new 
talent.    
(180)  Authors indeed can and do switch between music publishers. The Commission 
notes that typical contracts wi th authors appear to have a duration of no more 
than five years  (sometimes with an option to extend) . There is also a trend 
towards shorter retention periods (i.e., the period during which a publisher 
typically retains ownership in copyrighted work authore d by a writer after the 
writer has left) in response to increasing competition among music publishers 
(including from  Kobalt  which applies a “no lock -in” policy, which requires no 
commitment that authors’ repertoire remain with the publisher116). Exclusivity 
periods during which authors commit to deliver new repertoire to a single music 
publisher have been reduced to 1 -3 years. Likewise, contract retention periods 
during which a music publisher may exploit an authors’ repertoire have been 
also r educed to 1 -3 years. In the past, it was relatively common for an author to 
agree retention periods for the duration of the copyright in the work (70 years 
after the death of the author). While it is still possible to enter contracts on this 
basis in Franc e, Germany, and Italy, their incidence is declining. In Spain, 
Scandinavia, and Benelux, contract periods are typically three to five years in 
duration with retention periods of five to twenty years. In France the situation is 
similar, and it is unlawful t o enter into a publishing contract of longer than five 
years’ duration. In Germany, a writer can terminate after five years even if the 
publisher has not recouped any advances paid to the author.117 In the U.K., 
Sony/ATV typically enters into contracts of [i nformation on duration of 
                                                                                                                                                 
Sony/ATV, but have signed recording contracts with recorded music companies other than Sony 
Music include: [examples of singer -songwriters signed to Sony/ATV but not Sony Music]. Examples 
of singer -songwriters who are signed to Sony/ATV (for musi c publishing) and Sony Music (under 
recording contracts) include: [examples of singer -songwriters signed to Sony Music and Sony/ATV ].  
115 Artists and repertoire (A&R) is the division of a music publishing company (or recorded music 
company) with responsibil ity for talent scouting and overseeing the artistic and commercial 
development of authors. It also acts as a liaison between authors and the music publishing company.  
116 See, e.g., “Kobalt Capital Raises $600m Fund To Spend On Buying Music Copyrights,” Music 
Business Worldwide , November 6, 2017, citing Kobalt Founder and CEO Willard Ahdritz (“ This is a 
beautiful thing: our clients can leave our platform if they don’t like us … With Kobalt, no -one is locked 
in”). 
117 The collecting society will nevertheless co ntinue to pay royalties to the publisher in these 
circumstances until the account is recouped.   
41 Sony/ATV author contracts] years’ duration plus retention periods from 
[information on duration of Sony/ATV author retention periods] years post -
termination . Consequently, authors are readily able to switch between publishers 
both in relation to new works (which are not already subject to a retention 
period with another publisher) and, to an increasing extent, for older songs for 
which the retention period has expired. As a result, there is strong and regular 
competition for succes sful authors on all commercial terms of a publishing 
contract (including advances, royalty splits, and retention periods). This 
competition has strengthened since 2016, with narrowing royalty splits in 
authors’ favour, shorter contract terms and retention periods, and an increased 
prevalence of publishing contracts without retention periods.  
(181)  As to the alleged impact on consumer choice and cultural diversity, there  is no 
reason to assume that Sony has become (or will become more) biased  towards 
Anglo -America n repertoire118 or will reduce the size of its roster119 (although 
such a reduction would benefit Sony’s competitors and result in a  reduced 
“control share”). Further, since EMI MP is already commercially  integrated with 
Sony/ATV, neither is there any reason t o expect the  Transaction to have any 
impact on the size or composition of Sony/ATV’s  roster.  Finally, as to the 
request to carry out a “cultural diversity impact assessment,” in 
Sony/Mubadala/EMI Music Publishing  the Commission considered that as a 
result of its possible negative impact on competition, that transaction could also 
negatively impact cultural diversity .120 Given that the present Transaction does 
not raise concerns as to the level of consumer choice, the Commission also 
considers that the Transaction does not raise concerns as to cultural diversity.  
(182)  Further , the Commission notes that d uring the market investigation, authors 
have expressed a neutral view on the Transaction as they do not believe that the 
Transaction will change anything for their business or the quality of the services 
provided by Sony to them. 121  
(183)  Finally, given the absence of effects on the market for publishing services to 
authors, the Commission also dismisses IMPALA's concerns, acc ording to 
which if Sony were to be able to offer better terms for artists it would 
dynamically increase its revenues downstream. Similarly, due to the absence of 
effects in the downstream market for the licensing of online rights, the 
Commission also does not consider that the Transaction would increase Sony’s 
ability to attract artists in the upstream A&R market.  
(184)  In regard to c oordinated effects , at the outset, the Commission recalls that the 
Transaction will have no effect on the market for the provision of publishing 
services to authors as the Transaction will not increase Sony's market share 
which remains unaffected by the Transaction. For completeness, the 
                                                 
118 Sony/ATV has spent almost EUR […] million in 2017 on developing non -Anglo -American talent in the 
EEA (Sony submission of 4 September 2018, paragraph 48).  
119 [Description of EMI MP’s internal organisational structure, and of Sony’s future commercial strategy ]. 
120 The Commission took cultural diversity into account in Sony/Mubadala/EMI Music Publishing , where 
it noted: “ If end consumer choice for innovative, comprehensive and cheap online music services were 
to be reduced, this in turn would limit the number and breadth of music distribution channels that are 
available to competing music publishers. This ultimately reduces consumer choice for music and 
cultura l diversity ” (paragraph 240).  
121 See Questionnaire Q4 to authors / composers, questions 2 and 3.  
42 Commission notes that n othing suggests that coordinated effects are possible in 
relation to the su pply of publishing services to authors. The Commission's 
investigation in Sony/Mubadala/EMI  did not find " any significant impediment to 
effective competition stemming from coordinated effects in the market for 
publishing services to authors " (recital 134),  this conclusion was no different in 
Sony/Sony -ATV and the investigation of the present case does not invalidate this 
conclusion. First, contracts with authors are negotiated bilaterally and are 
confidential. There is therefore no transparency as to the “p ricing” or other 
terms agreed between authors and publishers. Second, publishers are in 
competition to win new author contracts, and a single song by a single author 
might generate more royalties than the catalogues of several other authors 
combined. There  is therefore no obvious basis on how publishers might tacitly 
collude over the authors that they sign, nor any obvious “punishment” 
mechanism by which a tacit co -ordination could be sustained. The incentives to 
compete for new authors would therefore dest abilize any putative co -ordination. 
Third, new publishers competing to sign new authors would undermine any 
putative ability for established players to reach a tacit understanding that would 
facilitate market -sharing. Fourth, there exists no plausible reta liatory mechanism 
that might sustain any tacit understanding in relation to the provision of 
publishing services to authors. Finally, in any event, in addition to the “major” 
music publishing companies, there are a large number of other publishers who 
woul d be able to undermine any coordination between them, including 
significant players like Kobalt, Concord, and Peermusic, as well as hundreds of 
smaller publishers.  
Mechanical rights  
(185)  In Sony/Mubadala/EMI , the Commission excluded competition concerns on thi s 
market because “ control over pricing and licensing terms [was] to a large 
extent in the hands of the collecting societies ” and Sony/ATV had no plans to 
withdraw its offline rights from collecting societies.122 The Commission reached 
the same conclusion in Sony/Sony -ATV,123 and, as explained below, the situation 
has not changed in the meantime.  
(186)  In 2017, Sony/ATV and EMI MP together accounted for around [20 -30]% of 
revenues generated from licensing mechanical rights in the EEA (between [10 -
20]% and [30 -40]% dep ending on the Member State). This share will be 
unaffected by the Transaction . Since 2012, Sony has exercised joint control over 
EMI MP and Sony/ATV has administered EMI MP’s catalogue under an 
Administration Agreement. Sony/ATV has had the sole and exclus ive right to 
license EMI MP’s mechanical rights over that period. Accordingly, the 
Transaction will have no effect on the market for the licensing of mechanical 
rights.  
(187)  Post-Transaction, Sony will continue to compete with a large number of other 
music pub lishers, including Universal, Warner/Chappell, BMG Rights 
Management, Kobalt, Concord, and Peermusic, as well as an array of smaller 
publishers and new entrants.  
                                                 
122 Sony/Mubadala/EMI, paragraph 100.  
123 Sony/Sony -ATV, paragraph 149.  
43 (188)  Some publishers claimed that publishers , such as Sony , can, on the one hand,  
withdraw their r ights from the traditional collecting society system and , on the 
other hand,  exert significant control from within the collective societies . 
(189)  The Commission considers that those concerns can be dismissed for the 
following reasons.   
(190)  Most music publishers in dicated during the market investigation that, as 
publishers, they would not be able to obtain control over mechanical rights 
(Continental repertoire) , which are licensed by the collecting societies and they 
cannot or have no interest in obtaining control o ver such rights. Furthermore, 
while p ublishers have indicated during the market investigation that they could 
obtain control over the offline licensing of mechanical rights (Anglo -American 
repertoire)(except Universal and BMG), and some publishers in fact already do 
have such control , most publishers indicated that they would have no interest in 
withdrawing the offline licensing of mechanical rights (Anglo -American 
repertoire) from the collecting societies. Only a few collecting societies 
indicated that mus ic publishing companies have withdrawn the exploitation of 
offline rights from the colleting society.   
(191)  With regard to publishers' influence over collecting societies' decisions, the 
Commission considers it unlikely that post -Transaction, Sony could gain 
control, whether formal or informal, over collecting societies in Europe.  
(192)  The decisions of collecting societies are taken by their boards, which comprise 
representatives of rights holders. The market investigation confirmed that m ost 
societies grant only a limited share of the voting rights to Sony/ATV or EMI 
MP.124 Based on the Notifying Party's submission , in the majority of collecting 
societies, the number of seats open to publishers is limited to one -third of the 
total number of seats or less.125  
(193)  Sony today exercises joint control over EMI MP, and Sony/ATV’s and EMI 
MP’s negotiations with and representation on the boards of collecting societies 
have, since 2012, been managed by Sony/ATV. Accordingly, there will be no 
change to Sony/ATV’s and EMI MP ’s relationship with collecting societies 
post-Transaction. Based on the Notifying Party's submission and as confirmed 
by the market investigation,  as a result of the Transaction, Sony/ATV will gain 
no more seats on any collecting society board.126 
(194)  Furthermore, a lthough it is technically possible to withdraw mechanical rights, 
based on the Notifying Party's submission, Sony has never contemplated doing 
so with respect to offline rights in Europe.   
(195)  Furthermore, during the market investigation, collect ing societies stated that the 
merged entity would have few or no voting rights in their boards, and will not 
gain additional voting rights post -Transaction. While a majority of  collecting 
societies  who replied to the market investigation consider that, if the publisher's 
                                                 
124 See Questionnaire Q3 to collecting societies, question 3.  
125 Sony submission of 4 September  2018, paragraph 8.  
126 See Questionnaire Q3 to collecting societies, question 3.1.  
44 catalogue is large enough127, there exist other means through which  that music 
publisher  can influence their decisions (e.g. during the general assembly) , not a 
single  collecting society that replied to the market investigation has replied th at 
post-Transaction Sony would be able to exert decisive influence over its 
decisions on offline publishing rights. 128  
(196)  Therefore, as recognized by the Commission in Universal/BMG , in 
Sony/Mubadala/EMI Music Publishing , and most recently in Sony/Sony -ATV, 
the Commission concludes that publishers are not in a position to exert a 
decisive influence on the collecting societies’ decisions and Sony  is therefore 
unable  to influence collecting societies’ commercial terms.   
(197)  Finally, given the absence of effects on t he market for mechanical rights, the 
Commission also dismisses IMPALA's concerns according to which if Sony 
were to be able to increase its revenues downstream it would then be able to 
offer better terms for artists, while the opposite would happen to the 
independents.  
(198)  In regard to coordinated effects, at the outset, the Commission recalls that the 
Transaction will have no effect on the market for mechanical rights as these are 
to a large extent in the hands of the collecting societies  and the Transaction will 
not increase Sony's market share which remains unaffected by the Transaction. 
For completeness, the Commission notes that n othing suggests that coordinated 
effects are possible in relation to mechanical rights. First, given that p ublishers 
do not set prices there is no possibility of tacit co -ordination in relation to price. 
Second, there has been significant new entry and expansion over recent years 
(including BMG Rights Management, Kobalt, and Concord). As publishers 
enter and co mpete to sign new authors in the upstream market, they create new 
works that generate mechanical rights income, undermining any putative ability 
for established players to reach a tacit understanding that would facilitate 
market -sharing. Third, competition  takes place in relation to individual songs 
and/or authors’ works, not on the basis of publishers’ repertoires as a whole. 
Because performing artists and their recorded music companies select individual 
songs for recording, publishers compete to have thei r authors’ songs recorded on 
an individual song basis. Fourth, there exists no plausible retaliatory mechanism 
that might sustain any tacit understanding in relation to the licensing of 
mechanical rights . Finally, in addition to the “major” music publishin g 
companies, there are a large number of other publishers who would be able to 
undermine any co -ordination between them, including significant players, 
Kobalt, Concord, and Peermusic.  
Performance rights  
(199)  In Sony/Mubadala/EMI , the Commission excluded compet ition concerns on this 
market because “ control over pricing and licensing terms [was] to a large 
extent in the hands of the collecting societies ” and Sony/ATV had no plans to 
                                                 
127 A majority of publishers have also replied that a publisher with a large enough repertoire is able to 
exert decisive influence on collecting societies' decisions, see Questionnaire Q1 to competitors, 
question 41. However, as noted, collecting societies th emselves do not consider that post -Transaction 
Sony would be able to exert decisive influence over its decisions on offline publishing rights.  
128 See Questionnaire Q3 to collecting societies, question 5.  
45 withdraw its offline rights from collecting societies.129 The Commission reached 
the same conclusion in Sony/Sony -ATV,130 and, as explained below, the situation 
has not changed in the meantime.  
(200)  The Parties' combined market shares in performing rights at an EEA -level in 
2017 are [20 -30]% and between [10 -20]% and [20 -30]% depending on the 
Member State. The Transaction will not increase Sony's market share . 
Moreover, since 2012, Sony has exercised joint control over EMI MP and 
Sony/ATV has administered EMI MP’s catalogue under an administration 
agreement. Sony/ATV has had the sole and exclusiv e right to license EMI MP’s 
performance  rights over that period.  
(201)  Post-Transaction, Sony will continue to compete with a large number of other 
music publishers, including Universal, Warner/Chappell, BMG Rights 
Management, Kobalt, Concord, and Peermusic, as well as an array of smaller 
publishers and new entrants.  
(202)  Furthermore , most music publishers indicated during the market investigation 
that, as publishers, they would not be able to obtain control over performance 
rights (be it Anglo -American repertoire or  Continental repertoire) which are 
licensed by the collecting societies and they cannot or have no interest in 
obtaining control over such rights. Only a few collecting societies indicated that 
music publishing companies have withdrawn the exploitation of offline rights 
from the colleting society.  
(203)  Finally, given the absence of effects on the market for performance rights, the 
Commission also dismisses IMPALA's concerns according to which if Sony 
were to be able to increase its revenues downstream it would t hen be able to 
offer better terms for artists, while the opposite would happen to the 
independents.  
(204)  In regard to coordinated effects, at the outset, the Commission recalls that the 
Transaction will have no effect on the market for performance rights as these are 
to a large extent in the hands of the collecting societies  and the Transaction will 
not increase Sony's market share which remains  unaffected by the Transaction. 
For completeness, the Commission notes that nothing suggests that coordinated 
effects are possible in relation to performance rights. First, given that prices are 
determined by collecting societies, there is no possibility o f tacit co -ordination 
in relation to price. Second, there has been significant new entry and expansion 
over recent years (including BMG Rights Management, Kobalt, and Concord). 
As publishers enter and compete to sign new authors in the upstream market, 
they create new works that generate performance rights income, undermining 
any putative ability for established players to reach a tacit understanding that 
would facilitate market -sharing. Third, there would be no ability to reach a tacit 
understanding facili tating market -sharing given the considerable complexity and 
volatility in the number of users exploiting performance rights in particular 
songs, which it would be impossible for publishers to discern. Licensees are 
numerous and widely spread. Authors and p ublishers’ revenues derive from the 
exploitation of their rights by users with whom they have no direct relationship. 
                                                 
129 Sony/Mubadala/EMI, paragraph 100.  
130 Sony/Sony -ATV, paragraph 149.  
46 For example, performance rights are exploited by a radio station playing a song 
or when a record is played in a restaurant.  Fourth, there  exists  no plausible 
retaliatory mechanism that might sustain any tacit understanding in relation to 
the licensing of performance rights. Finally, in addition to the “major” music 
publishing companies, there are a large number of other publishers who would 
be abl e to undermine any co -ordination between them, including significant 
players, Kobalt, Concord, and Peermusic.  
Synchronisation rights  
(205)  In Sony/Mubadala/EMI , the Commission excluded competition concerns in the 
licensing of synchronization rights, including b ecause customer choice is 
typically driven by the choice of song, rather than the identity of the music 
publisher.131 The Commission reached the same conclusion in Sony/Sony -
ATV,132 and, as explained below, the situation has not changed in the meantime.  
(206)  The Pa rties' combined market shares at an EEA -level in 2017 are [20 -30]% for 
synchronisation rights and between [10 -20]% and [30 -40]% depending on the 
Member State. The Transaction will not increase Sony's market share . 
Moreover, since 2012, Sony has exercised j oint control over EMI MP and 
Sony/ATV has administered EMI MP’s catalogue under an administration 
agreement. Sony/ATV has had the sole and exclusive right to license EMI MP’s 
synchronization  rights over that period. Accordingly, the Transaction will have 
no effect on the market for the licensing of synchronization rights . 
(207)  Post-Transaction, Sony will continue to compete with a large number of other 
music publishers, including Universal, Warner/Chappell, BMG Rights 
Management, Kobalt, Concord, and Peermusic, as well as an array of smaller 
publishers and new entrants.  
(208)  Given that these rights are typically licensed on a song -by-song basis , concerns 
can be excluded  because customer choice is typically driven by the choice of 
song, rather than the identity of the  music publisher, and many alternative 
publishers with a large choice of songs would remain post -transaction.  
(209)  Finally, given the absence of effects on the market for synchronisation rights, 
the Commission also dismisses IMPALA's concerns according to which  if Sony 
were to be able to increase its revenues downstream it would then be able to 
offer better terms for artists, while the opposite would happen to the 
independents.  
(210)  In regard to coordinated effects, at the outset, the Commission recalls that the 
Tran saction will have no effect on the market for synchronisation rights as the 
Transaction will not increase Sony's market share which remains unaffected by 
the Transaction. For completeness, the Commission notes that nothing  suggests 
that coordinated effects  are possible in relation to synchronization rights. First, 
synchronization rights  are negotiated bilaterally and the terms of such contracts 
are not publicly available . There is therefore no transparency in relation to the 
                                                 
131 Sony/Mubadala/EMI, paragraph 126.  
132 Sony/Sony -ATV, paragraph 153 -154. 
47 royalties charged for synchronization rights .133 Second, given that there are 
alternative sources of such rights and a variety of end -users, with each song 
being to a degree unique, it would be impossible to reach a tacit understanding 
between publishers to share customers. Third , there exists no plausible 
retaliatory mechanism that might sustain any tacit understanding in relation to 
synchronization rights . Finally, in any event, in addition to the “major” music 
publishing companies, there are a large number of other publishers w ho would 
be able to undermine any coordination between them, including significant 
players like Kobalt, Concord, and Peermusic . 
Print rights  
(211)  In Sony/Mubadala/EMI , the Commission excluded competition concerns in the 
licensing of print rights, including beca use Sony would continue to face 
competition from rival music publishers.134 The Commission reached the same 
conclusion in Sony/Sony -ATV,135 and, as explained below, the situation has not 
changed in the meantime.  
(212)  The Parties' combined market shares at an EEA -level in 2017 are [10 -20]% for 
print rights and between [0 -5]% and [20 -30]% depending on the Member State. 
The Transaction will not increase Sony's market share . Moreover, since 2012, 
Sony has exercised joint control over EMI MP and Sony/ATV has administered  
EMI MP’s catalogue under an administration agreement. Sony/ATV has had the 
sole and exclusive right to license EMI MP’s print rights  over that period.  
(213)  Post-Transaction, Sony will continue to compete with a large number of other 
music publishers, includin g Universal, Warner/Chappell, BMG Rights 
Management, Kobalt, Concord, and Peermusic, as well as an array of smaller 
publishers and new entrants.  
(214)  Finally, given the absence of effects on the market for print rights, the 
Commission also dismisses IMPALA's c oncerns according to which if Sony 
were to be able to increase its revenues downstream it would then be able to 
offer better terms for artists, while the opposite would happen to the 
independents.  
(215)  In regard to coordinated effects, at the outset, the Commis sion recalls that the 
Transaction will have no effect on the market for print rights as the Transaction 
will not increase Sony's market share which remains unaffected by the 
Transaction. For completeness, the Commission notes that nothing  suggests that 
coordinated effects are possible in relation to print rights. First, print rights are 
negotiated bilaterally between music publishers and print music publishers. The 
pricing terms for print rights are not transparent, as the terms of these contracts 
are confi dential. As a result, music publishers are unable to monitor the prices 
charged by their rivals to print music publishers or other users. Second, revenues 
from print rights are derived from works of successful authors, and therefore 
from competition to sig n successful authors in the upstream market. As already 
noted, there has been significant new entry and expansion in recent years 
                                                 
133 See also in this regard: Sony/Mubadala/EMI, paragraph 137 and  Universal/BMG, paragraph 125.  
134 Sony/Mubadala/EMI, paragraphs 103 and 110.  
135 Sony/Sony -ATV, paragraph 155 -156. 
48 (including BMG Rights Management, Kobalt, Concord, and Peermusic), 
undermining any putative ability for established players to  reach a tacit 
understanding that would facilitate market -sharing. Third, there exists no 
plausible retaliatory mechanism that might sustain any tacit understanding in 
relation to the licensing of print  rights. Finally, in any event, in addition to the 
“major” music publishing companies, there are a large number of other 
publishers who would be able to undermine any coordination between them, 
including significant players like Kobalt, Concord, and Peermu sic. 
6.3. Vertical relationships  
(216)  Music p ublishing rights are licensed for use in a number of downstream markets 
where other companies of the Sony Group are present, including:  
(a) recorded music , which involves licensing mechanical publishing rights ;  
(b) online music  platforms , which involves licensing online rights136;  
(c) motion picture production , which may involve licensing synchronization 
rights ;  
(d) TV programme production , which may involve licensing synchronization 
rights ; and, 
(e) videogame production , which may involve licensing synchronization 
rights .  
(217)  The Transaction may at least conceivably bring a change in these vertical 
relationships . Pre-Transaction Mubadala would not have allowed Sony to 
sacrifice revenues on the music publishing side in order to support the 
down stream business of Sony Group by foreclosing downstream rivals, whereas 
post-Transaction, if such strategy were to be profit maximising at a group level, 
this could be envisaged. Similarly, the incentive to engage in the foreclosure of 
upstream rivals may theoretically be increased due to the fact that profit 
increments upstream would no longer have to be split with Mubadala.  
(218)  Where there are vertically affected markets, two possible forms of foreclosure 
arise. The first is where the merger is likely to rai se the costs of downstream 
rivals by restricting their access to an important input (input foreclosure). The 
second is where the merger is likely to foreclose upstream rivals by restricting 
their access to a sufficient customer base (customer foreclosure).   
(219)  During the market investigation, Impala claimed that Sony Group's interests in 
(i) the production, acquisition and distribution of feature films; (ii) the 
production and distribution of videogames; and (iii) the production and 
distribution of television programmes  may give rise to input foreclosure . 
According to Impala, pre -Transaction, Sony/ATV had a strong incentive to 
license its content to its own downstream businesses and to similar third -party 
                                                 
136 Sony Group has a minority, non -controlling interest in Vevo, LLC (“VEVO”), a music video website 
owned by Sony Music, Universal Music, Abu Dhabi Media, and Google. As this share does not grant 
Sony any control over VEVO, the vertical relationship b etween Sony/ATV and VEVO is not further 
discussed in this decision.  
49 controlled competitor businesses in order to maximise th e revenues flowing 
back to Mubadala in respect of the EMI MP catalogue. The change from joint to 
sole control would  increase Sony /ATV’s incentive to pursue a strat egy of 
refusing to license Sony/ ATV’s songs (including those in the EMI MP 
catalogue) or to l icense only on commercially unfavourable terms to those on 
which it licenses to other Sony businesses.137 
(220)  Considering the estimated combined market shares of Sony/ATV and EMI MP 
in the relevant upstream markets and the estimated market shares of the Sony 
group in the relevant downstream markets, a number of relevant markets are 
affected:  
(a) As noted, recorded mus ic involves licensing mechanical publishing rights. 
In the upstream market for the exploitation of mechanical rights 
Sony/ATV and EMI MP's market share is 30% or higher in the following 
six countries: the Czech Republic, Denmark, Greece, Poland, Portugal a nd 
Slovenia. As regards the downstream market for recorded music, the 
market share of Sony Music is 30% or higher in the following three 
countries: Spain, Italy and Denmark.  
(b) Motion picture production, TV programme production and videogame 
production may i nvolve licensing synchronization rights. In the upstream 
market for the exploitation of synchronisation publishing rights, 
Sony/ATV and EMI MP's market share is above 30% in the following six 
countries: Germany , the United Kingdom, the Czech Republic, Poland, 
Greece and  Slovenia . As regards the other downstream markets mentioned 
above (motion picture production; TV programme production; and 
videogame production), the market shares of Sony Group's downstream 
businesses do not exceed 30%.  
(221)  Section 6.3.1 discus ses the vertical link between the licensing of mechanical 
publishing rights and recorded music ; Section 6.3.2 discusses the vertical link 
between the licensing of synchronization rights and motion picture production, 
TV programme production and videogame p roduction . 
6.3.1.  Licensing mechanical rights for recorded music  and recorded music  
6.3.1.1.  Recorded music - Product market definition   
(222)  Sony is active in recorded music through its wholly -owned subsidiary Sony 
Music Entertainment Inc. ("Sony Music"), which is the successor of a 50/50 
joint venture formed in 2004 between Sony and Bertelsmann, which was known 
at the time as Sony BMG, before becoming wholly owned by Sony in 2008.  
(223)  Recorded music is sold in physical form (mainly CDs) and digital form. When 
producing an album, recorded music companies require the grant of mechanical 
rights to each of the musical works that will be recorded by th e artist. Royalty 
rates for licensing mechanical rights are determined by national collecting 
societies, which play an essential role in the administration of such rights, 
                                                 
137 Final IMPALA Preliminary Submission, 14 August 2018, page 32.  
50 through monitoring sales and collecting royalties on behalf of authors and their 
publishers.  
(224)  The Notifying Party submits that there is no reason to distinguish between 
physical and digital distribution channels of recorded music companies.  
(225)  In previous cases, the Commission has distinguished between physical and 
digital recorded music.138 The market investigation in the present case has  not 
provided any indications that the Commission should depart from its previous 
findings. In any event, no vertical concerns arise, regardless of whether separate 
physical and digital recorded music  markets are distinguished or not.   
6.3.1.2.  Recorded music - Geographic market definition  
(226)  The Notifying Party submits  that broad geographic market definitions are most 
appropriate for the purpose of assessing vertical effects in the present case.  
(227)  In Sony/SonyBMG , the Commi ssion considered that the market for the sale of 
recorded music in physical format and market for the licensing of recorded 
music in digital format had a national scope.139 In Universal Music Group/EMI 
Music  the Commission concluded that the market for the w holesale distribution 
of physical recorded music and of digital music were national in scope and 
noted that in any event, the competitive assessment remained the same even if 
the wholesale distribution of digital music market were considered to be EEA -
wide .140 
(228)  In the present case, it can be left open whether the geographic market definition 
is national or EEA wide as no vertical concerns arise, regardless of whether the 
geographic market is EEA wide or national . 
                                                 
138 Sony/SonyBMG , paragraphs 12 and 18; Universal Music Group/EMI Music , paragraphs 117 -167. To 
assess the vertical relationsh ip between music publishers and recorded music companies, the Notifying 
Party submits that there is no reason to distinguish between physical and digital distribution channels 
of recorded music companies because of general considerations which apply to the  vertical assessment 
of the present Transaction, i.e.: 
- As regards potential concerns about customer foreclosure (i.e., a possible concern that Sony Group’s 
downstream businesses could foreclose competition in upstream music publishing markets), the 
Notif ying Party submits that such concerns are not likely to turn on the exact delineation of 
downstream markets or sub -markets. Instead, this analysis depends on the overall share of relevant 
purchases accounted for by the various downstream businesses. For ex ample, for the licensing of 
synchronization rights, customer foreclosure effects do not turn on, e.g., market definition in 
videogame production, but on the overall importance of Sony Group’s downstream businesses as a 
share of total synchronization rights  consumption.  
- As regards potential concerns about input foreclosure, ( i.e., a possible concern that Sony/ATV or 
EMI MP could foreclose competition in downstream markets) the Notifying Party submits that such 
concerns do not turn on the exact delineation of downstream markets or sub -markets either. Instead, 
this analysis depends on the combined position of Sony/ATV and EMI MP in the relevant upstream 
music publishing market and the importance of the input at issue. In the absence of a dominant 
position on any upstream market, downstream input foreclosure is unlikely, irrespective of the precise 
downstream market definition.  
139139 Sony/SonyBMG , paragraphs 37 and 41.  
140 Universal Music Group/EMI Music , paragraphs 231 -232. 
51 6.3.1.3.  Input foreclosure  
(229)  In a merger between companie s which operate at different levels of the supply 
chain, anti -competitive effects may arise when the merged entity's behaviour 
could limit or eliminate competitors' access to supplies (input foreclosure).  
(230)  In assessing the likelihood of an anticompetitive i nput foreclosure scenario, the 
Commission examines: (i) whether the merged entity would have post -merger 
the ability to substantially foreclose access to input; (ii) whether the merged 
entity would have the incentive to do so; and (iii) whether a foreclosu re strategy 
would have a significant detrimental impact on effective competition 
downstream.141 
(231)  The Notifying Party submits that the Transaction will not give Sony Group the 
ability or incentive to engage in input foreclosure. First, [information on Sony’s 
future commercial strategy]. Second, Sony/ATV would not have sufficient 
upstream power to engage in a succes sful input foreclosure strategy . Third, 
authors, who have the final say on whether to contract with a particular music 
publisher or recorded music co mpany, would not countenance any policy 
designed to favour Sony Music. Fourth, mechanical rights are administered and 
licensed for offline use by collecting societies, which set the pricing and the 
licensing terms for those rights on a fair and non -discrim inatory basis, not by 
publishers. Fifth, such strategy would not have a material effect, given the 
strong competition from other recorded music companies (in particular 
Universal Music and Warner Music).  
(232)  The Commission considers that any risk of input fore closure by Sony/ATV to 
the benefit of Sony Music can be excluded from the outset. First, as explained 
above, the control over offline mechanical rights, which is the relevant input for 
the downstream recording music market, is in the hands of the collectin g 
societies, which set the pricing and the licensing terms for those rights on a fair  
and non -discriminatory basis. Second, the Parties' estimated combined share in 
publishing mechanical rights would be 30% or higher in just six EEA Member 
States: the Czec h Republic ([30 -40]%), Denmark ([30 -40]%), Greece ([30 -
40]%), Poland ([30 -40]%), Portugal ([30 -40]%), and Slovenia ([30 -40]%), and 
therefore, given these market shares do not enjoy a sufficient degree of market 
power to engage in a successful input foreclo sure strategy . In any event, Sony's 
market share for the licensing of mechanical rights is unaffected by the 
Transaction given that , since 2012, Sony has exercised joint control over EMI 
MP and Sony/ATV has administered EMI MP’s catalogue and had the sole and 
exclusive right to license EMI MP’s mechanical rights over that period. Finally, 
other than IMPALA respondents to the market investigation did not raise input 
foreclosure concerns.  
6.3.1.4.  Customer foreclosure  
(233)  According to the Non -Horizontal Merger Guidelines  a downstream firm being 
part of a vertical merger may refuse to buy inputs from its rivals input suppliers 
                                                 
141  See Guidelines on the assessment of no n-horizontal mergers under the Council Regulation on the 
control of concentrations between undertakings ("Non -Horizontal Merger Guidelines"), OJ C 265, 
18.10.2008, p. 11, paragraph 32.  
52 as a result of the Proposed Transaction. This incentive to foreclose access to 
customers downstream may result from the vertical integration of an u pstream 
supplier with an important customer downstream. Due to their downstream 
presence, the merged entity may foreclose its upstream rivals' access to an 
important customer base. In turn this can inhibit upstream rivals to effectively 
compete.142 
(234)  The Notifying Party submits that Sony music does not have the ability or the 
incentive to engage into a successful customer foreclosure strategy to the benefit 
of Sony/ATV. First, it would not have sufficient market power in the market for 
recorded music. Sony  Music’s estimated 2017 share of European recorded 
music sales was below 25%, with shares for physical and digital sales estimated 
at [20 -30]% and [20 -30]%, respectively. Sony Music’s share is below 30% in all 
but three Member States143 ([30-40]% in Denmark,  [30-40]%  in Italy, and [30 -
40]% in Spain). Second, the objective of Sony Music is to sell as many records 
as possible and it would be commercially ruinous for it to constantly overlook 
songs that it believed would be commercially successful, or to licens e songs that 
it thought would be unlikely to be successful, in order to prefer authors 
contracted to Sony/ATV or EMI MP . 
(235)  The Commission considers that, as the Transaction does not lead to an increase 
the size of Sony Music recorded music business, it  does  not make a possible 
customer foreclosure strategy more profitable than pre -merger. In any event, 
even pre -merger, it would not make sense for Sony Music not to source 
mechanical rights belonging to publishers other than Sony/ATV and/or EMI MP 
as these pub lishers only account for a limited portion of the upstream market 
and Sony Music has an incentive to offer to its customers (and its recording 
artists) songs from the broadest possible number of authors and composers. 
Finally, respondents to the market inv estigation did not raise customer 
foreclosure concerns.  
6.3.2.  Licensing of synchronization rights for videogames , motion pictures 
and TV programmes  and videogame production, production of 
motion pictures and production of TV programmes  
(236)  As the relevant input for the videogames, the motion pictures, and the 
production of TV programmes is the same (synchronisation rights) the vertical 
effects on these downstream markets will be analysed jointly by the 
Commission.  
6.3.2.1.  Product market definition  
(a) Videogame production    
(237)  Sony  Group is active in videogame production through its wholly -owned 
subsidiary Sony Interactive Entertainment, which develops and publishes video 
game titles for its PlayStation range of handheld and home console video game 
                                                 
142 Non-Horizontal Merger Guidelines, paragraph 58.  
143 Sony Music’s  share in physical sales exceed 30% only in Italy ([30 -40]%). Sony Music’s share in 
digital sales exceeds 30% only in Italy ([30 -40]%), Spain ([30 -40]%), Portugal ([30 -40]%), and 
Denmark ([30 -40]%).  
53 systems. Videogames require synchr onization right licences to use copyrighted 
music synchronized with the visual image.  
(238)  In Vivendi/Activision144, the Commission assessed the vertical relationship 
between Vivendi and Activision against an overall downstream market for all 
videogames.  
(b) Produc tion of motion pictures  
(239)  Motion pictures incorporate songs and music, which in turn require a 
synchronization licence of the relevant musical work.145 Sony produces, 
acquires, and distributes motion pictures for theatrical release through its wholly 
owned sub sidiary Sony Pictures Entertainment (“SPE”). SPE’s motion picture 
interests include Colombia Pictures, Tri -Star Pictures, Sony Pictures Classics, 
and Screen Gems.  
(240)  In Sony/SonyBMG ,146 the Commission considered a vertical relationship with 
Sony’s downstream m otion picture production interests based on an overall 
market for motion pictures (assessed through box office revenues ). Also in 
Sony/Mubadala/EMI Music Publishing147, the Commission viewed motion 
picture production as a separate relevant market, with a possible sub -segment 
limited to U.S. -produced films.  
(c) The production of TV programmes  
(241)  TV production companies require synchronization rights from the copyright 
holder/pub lisher to incorporate music in TV programmes. SPE produces and 
distributes TV programmes. SPE’s principal TV operations are run through its 
wholly -owned subsidiary Sony Pictures Television Group (“SPTG”), which 
owns and distributes its own programmes, as w ell as programmes developed by 
a number of companies, including Tandem Productions, ELP Communications, 
and Barry & Enright Productions. The Commission notes that this market is also 
referred to as the production of “other TV content”.148 
(242)  The Notifying Party  submits that f or the purpose of assessing vertical effects, 
consistent with the approach taken by the Commission in Sony/Mubadala/EMI 
Music Publishing , the relevant downstream market is TV programme production 
with no need for further delineation.149 Accord ing to the Notifying Party the 
vertical relationship between music publishing and TV programme production 
                                                 
144 Vivendi/Activision, paragraphs 77 -82. 
145 Synchronization  customers also require a recorded music licence if they choose to synchronize a pre -
recorded version of a particular work. Alternatively, once a customer has been granted the music 
publishing synchronization right, they can choose to record a new version of the relevant work.  
146 Sony/SonyBMG , paragraph 96.  
147 Sony/Mubadala/EMI Music Publishing, paragraph 276.  
148 With regard to the market for the production and supply of TV audio -visual content, in previous 
decisions, the Commission has concluded that there are separate markets for: (i) the production and 
supply of commissioned TV content; and (ii) the licensing o f broadcasting rights for pre -produced TV 
content (available ‘off -the-shelf’) (see Commission decision of 7 April 2017 in case M.8354 – Fox / 
Sky.  Commission decision of 24 February 2015 in case M.7194 – Liberty Global / Corelio / W&W / 
De Vijver Media ).  
149 Sony/Mubadala/EMI Music Publishing , paragraph 277.  
54 does not give rise to any concerns, irrespective of the downstream market 
definition adopted.150 
(243)  The Commission considers that the question whether the market for TV 
programme production should be further segmented can be left open given that 
the Transaction does not give rise to vertical concerns irrespective of the precise 
product market definition.  
6.3.2.2.  Geographic Market definition   
(244)  The Notifying Party submits that broad geographic market definitions are most 
appropriate for the purpose of assessing vertical effects in the present case151 
and that a ccordingly, the relevant geographic markets for each downstream 
business are at least EEA -wide in scope . 152 
(245)  The Commission considers that the question whether the downstream markets 
are national or EEA -wide can be left open as regards videogame production and 
the production of TV programmes  as the Transaction does not raise serious 
doubts under any plausible geo graphic market definition , while the market for 
the production of motion pictures is EEA -wide .153 
6.3.2.3.  Input foreclosure  
(246)  The Notifying Party submits that , first, whilst music is generally needed to 
produce certain motion pictures, TV programmes and videogames, co ntent 
producers have many alternatives to Sony/ATV's repertoire. Second, the 
Notifying Party submits that synchronization fees represent a small proportion 
of the typical cost of producing a motion picture, TV programme, or videogame 
and any such strategy would not be capable of materially affecting competition 
on any downstream market.  On this basis, the Notifying Party considers that the 
Transaction will not give Sony Group the ability or the incentive to engage in 
input foreclosure.  
(247)  In its decision in Sony/Mubadala/EMI , the Commission considered, as regards 
the ability of Sony/ATV to foreclose Sony Group's downstream competitors, 
that if Sony/ATV were to engage in foreclosure, content producers competing 
with Sony Group's downstream business would retain  sufficient alternatives in 
the market for synchronisation publishing rights.154 The Commission considered 
                                                 
150 The Notifying Party submits that SPTG’s TV programme production shares are well below 20% in 
each of the possible subsegmentations of this market (as used in past Commission decisions such as in 
Commi ssion decision of 7 April 2017 in case M.8354, Fox/Sky ) including in (i) the production and 
supply of commissioned TV content and (ii) the licencing of broadcasting rights for pre -produced TV 
content (and its possible subsegments by content type (films, sp orts and other TV content) and by 
exhibition window (SVOD, TVOD, PPV, First Pay -TV window, Second Pay -TV window, FTA).  
151 See Sony/Mubadala/EMI Music Publishing , paragraph 288; Sony/Sony -ATV, paragraph 179.  
152 The Notifying Party submits that producers of TV  programmes, motion pictures, and videogames do 
not typically vary their selection of music publishing rights as between countries. Rather, the choice of 
songs used for a given motion picture, TV programme, or videogame is made by the production studio 
on a global basis, very often outside the EEA (e.g., the United States). For these reasons, an EEA -level 
geographic market definition is the most appropriate way to assess these vertical relationships.  
153 Commission Decision of 13 July 2010 in Case M.5779 - Comcast / NBC Universal , at para. 54.  
154  Sony/Mubadala/EMI , recital 283.  
55 that it was unlikely that Sony/ATV would have the incentives to adopt such a 
strategy as it would forego revenues from synchronisation rights whereas t he 
impact to increase revenues on the downstream markets (through the production 
costs for computer games, TV programmes or films) appeared to be de 
minimis .155 The Commission also considered that any attempt at input 
foreclosure on the part of Sony/ATV woul d risk undermining its credibility and 
reputation on the market for publishing services to authors.  
(248)  In its Decision in Sony/Sony -ATV156, the Commission noted that during  the 
market investigation, the Commission consulted the views of competitors of 
Sony Grou p's videogame, motion picture and TV productions as regards the 
availability of songs to synchronise with the content they produce post 
Transaction. The majority of the respondents in each relevant downstream 
market had confirmed that, post Transaction, th ey would still have a sufficient 
choice of songs to synchronise with their contents, even without Sony's songs. 
They also confirmed that they did not expect that Sony Group would foreclose 
access to the catalogue of Sony/ATV.   
(249)  The Parties' estimated combin ed share at an EEA -level in 2017 are [20 -30]% for 
synchronisation rights and is above 30% only in the following six Member 
States: Germany ([30 -40]%), the United Kingdom ([30 -40]%), the Czech 
Republic ([40 -50]%), Poland ([30 -40]%), Greece ([30 -40]%) and Sl ovenia ([30 -
40]%) and therefore, given these market shares do not enjoy a sufficient degree 
of market power to engage in a successful input foreclosure strategy . Moreover , 
the Transaction will not increase Sony's market share  for the licensing of 
synchroni zation rights given that since  2012, Sony has exercised joint control 
over EMI MP and Sony/ATV has administered EMI MP’s catalogue and has  
had the sole and exclusive right to license EMI MP’s synchronization rights 
over that period. Accordingly, the Transa ction will have no effect on Sony's 
upstream market share.  
(250)  In addition , the Commission notes that during the market investigation, no 
competitors of Sony Group's videogame, motion picture and /ot TV productions 
complained about a potential input foreclosure. Furthermore, it is unlikely that 
Sony/ATV’s incentives would change post -Transaction because its reputation 
and ability to attract and retain authors depends, in part, on its ability to licens e 
their rights as widely as possible and on the best available terms. Any systematic 
policy that sought to favour Sony Group’s downstream businesses could 
jeopardize Sony/ATV’s reputation and impair its competitiveness. Furthermore, 
given the alternatives to Sony/ATV's repertoire and the small cost that 
synchronization rights represent in the overall cost of production of a 
videogame, a motion picture or a TV programme, even if Sony/ATV were to 
favour Sony Group’s downstream businesses, it is unlikely that any such policy 
would (or could) have a material effect on the competitive position of either 
Sony Group’s downstream businesses or competitors of those businesses.   
                                                 
155  Sony/Mubadala/EMI , recital 284.  
156  Sony/Sony -ATV, paragraph 174.  
56 6.3.2.4.  Customer foreclosure  
(251)  The Notifying Party submits, first, that the market shares of Sony Gr oup's 
downstream businesses in the relevant downstream markets are too low to 
constitute a sufficient customer base to engage in customer foreclosure. Second, 
the Notifying  Party submits that engaging in customer foreclosure would be 
highly detrimental to Sony Group's downstream businesses and would have no 
effect on Sony/ATV's competitors.  
(252)  First, t he Commission notes that the market shares of Sony Group's businesses 
in the downstream markets for  each of  videogames, motion pictures and TV 
programmes are th e following:  
(a) Videogames: Sony estimates that its shares of EEA videogame revenues are 
below 5%. Sony also estimates that its EEA -wide market shares in all plausible 
market segments are the following: games for handled consoles only ([0 -5]%), 
games for mobi le handsets (handheld consoles and mobile and tablet devices) 
([0-5]%), music games ([0 -5]%); games for TV consoles and handled consoles 
([10-20]%); offline games for Sony PlayStation consoles ([10 -20]% ); 
(b) Motion pictures: Sony estimates that its share of r evenues from the production 
of motion pictures is approximately [5-10]% in the EEA and that in a potential 
motion picture production market limited to US -produced films, the Parties 
submit that SPE's market share in the EEA would be below 25% ; and  
(253)  TV progr ammes: Sony estimates that its share of revenues in TV programmes is 
below 5% in the EEA and that such share does not exceed 20% in any EEA 
Member State or linguistically homogenous area.  
(254)  Based on the above, the Commission considers that the relevant Sony Group 
businesses therefore do not constitute a sufficient customer base for Sony to 
have the ability to foreclose competing music publishers . 
(255)  Second, the Commission notes that the evidence submitted by the Parties shows 
that Sony Group's businesses in the downstream markets for motion pictures, 
TV programmes and video games have traditionally not preferred Sony/ATV's 
repertoire. Data concerning the songs used in the top 8 grossing movies in the 
season 2016/2017 by Columbia Pictures (controlled by SPE) show that only 
[…]% of these songs involved synchronization licence from Sony/ATV, […]% 
from EMI MP and […]% from Sony Music. These shares are lower than 
Sony/ATV's and EMI MP's EEA market shares for synchronisation rights of 
[20-30]%. Data concerning the songs  used in the TV programmes produced by 
Sony Pictures Television Group during the season 2016/2017 show that less 
than […]% of these songs involved synchronisation licence from Sony/ATV, 
less than […]% from EMI MP and around […]% from Sony Music. These 
figures are lower than Sony/ATV's and EMI MP's EEA market shares for 
synchronisation rights of [20 -30]%. Data concerning the use of songs in 
videogames produced by Sony interactive Entertainment Europe in 2017 show 
that […]% of these songs involved synchroniza tion rights licensed from 
Sony/ATV, […]% licensed from EMI MP and […]% licensed from Sony Music . 
57 6.3.3.  Conclusion on vertical effects  
(256)  For the reasons above, the Commission concludes that the transaction does not 
raise serious doubts as to its compatibility with the internal market in relation to 
vertical effects.  
7. CONCLUSION  
(257)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with 
the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of 
the Merger Regulation and Article 57 of the EEA Agreement.  
For the Commi ssion  
 
(Signed ) 
Margrethe VESTAGER  
Member of the Commission