Mergers: Commission opens in-depth investigation into a joint venture for online music licensing between collecting societies PRSfM, STIM and GEMA

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The European Commission has opened an in-depth investigation to assess whether the proposed creation of a joint venture between three collective rights management organisations (CMOs) in the online licensing of musical works is in line with the EU Merger Regulation. The CMOs contributing to the joint venture are PRS for Music Limited (PRSfM) of the United Kingdom, Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. (STIM) of Sweden and Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA) of Germany. CMOs manage the copyrights of authors, performers and writers of musical works. They also grant licences on their behalf and redistribute the royalties collected from the exploitation of their copyrights.

The Commission’s preliminary investigation indicated that the combination of the music repertoires currently controlled by each of PRSfM, STIM and GEMA could result in higher prices and worsened commercial conditions for digital service providers (DSPs) in the European Economic Area (EEA). This could lead, ultimately, to higher prices and less choice for European consumers of digital music. DSPs provide online services to final customers, such as music downloading or streaming and to operate on the market they need licences delivered by CMOs. The Commission has concerns that the transaction may reduce competition in the EEA for copyright administration services provided to certain publishers since the proposed transaction would essentially reduce the number of meaningful market players from four to two. The opening of an in-depth inquiry does not prejudge the outcome of the investigation. The Commission has now90 working days, until 29 May 2015, to take a final decision on whether the proposed transaction would significantly impede effective competition in the EEA. Here to read more.

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