Brussels, 8th December 2006
Mergers: Commission opens in-depth investigation into Universal’s take over of BMG's music publishing business
The European Commission has decided to open a full investigation under the EU Merger Regulation into the proposed acquisition of the music publishing business of Germany’s Bertelsmann Music Group (BMG) by Universal, a US-subsidiary of the French company Vivendi. The Commission’s initial market investigation indicates that the proposed merger would raise serious doubts as regards adverse effects on competition in the already concentrated music publishing market. The decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days (until 27 April 2007) to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area (EEA) or any substantial part of it.
Universal, a US-based company owned by the French company Vivendi, is a leading player in the music recording and music publishing business. The target business consists of the worldwide music publishing activities of BMG.
On 3 November 2006, Universal notified to the Commission the proposed acquisition of BMG’s global music publishing activities. After a preliminary review, the Commission has decided to investigate in-depth whether the deal might lead to a significant impediment of competition on the markets for music publishing.
Music publishers exploit song writers’ copyrights on songs by granting licenses to users of music. Song writers are either composers of melodies or lyricists who write the words of the songs. The most common music publishing rights are mechanical rights (e.g. for recorded music), performance rights (e.g. for concerts and TV and radio broadcasting) and synchronisation rights (e.g. for advertisement spots and film music). For mechanical and performance rights, collecting societies have traditionally carried out the licensing on behalf of the song writers and their publishers.
On both the recorded music market and the music publishing markets, the same five vertically integrated companies (Universal, BMG, EMI, Warner and Sony) together hold the main share of the market. The rest of the market is split among a large number of small competitors. Universal is the strongest player in music recording. After the proposed merger it would become also the largest music publisher in the EEA.
During its in-depth market investigation, the Commission will investigate whether the leading position of Universal and the further concentration of the market structure would be likely to have a negative impact on fees for publishing rights or on the conditions for song writers in the EEA or in individual Member States. In assessing the effects of the merger, the Commission will take into account the role and position of the collecting societies.
More information on the case will be available at: