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CADE approves purchase of EMI by Universal Music and Sony

Merger

Transactions were approved without restrictions by the Tribunal
published: Sep 27, 2013 10:00 AM last modified: May 03, 2016 04:06 PM

The Administrative Council for Economic Defense - CADE authorized, on Wednesday (11), two operations related to business acquisitions phonographic EMI Group Global Limited, from Citigroup Inc. After a corporate restructuring of Citigroup, the businesses of recording and editing music at EMI were separated. The first was acquired by Universal Music Holdings Limited and the second by Sony Corporation of America.

The market for music recording consists in the discovery and development of artists; music recording; organization, manufacturing, distribution and marketing of music releases in physical and digital format. The music publishing activity refers to the acquisition, management, protection and commercial exploitation of intellectual property rights of music and lyrics of musical works.

CADE’s Tribunal understood that both operations do not raise concerns from the competition standpoint.

According to the reporting commissioner, Alessandro Octaviani, although the recording market (Merger file no. 08012.012428/2011-39) is concentrated by the biggest companies (a group formed by Universal Music, Sony, Warner and Som Livre), there is a strong rivalry between them. Moreover, the independent labels - more than 340 currently – increase the competitive pressure in the music market.

The operation that involves the segment of music publishing (Merger file no. 08012.012431/2011-52) affects the upstream markets, which is the provision of marketing services to authors, and the downstream markets, related to the exploitation of copyright. In none of the two segments any competitive risk was identified.

"While there are alternative publishers with a significant role to which authors may migrate, I understand that there will not be any competitive concerns as a result of the decrease in the quality of services provided by the parties," explained Octaviani. The reporting commissioner of the case involving the acquisition of EMI by Sony, and author of the review vote on the operations related to the purchase of the music recording by Universal Music.