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UK Music Streaming Sector Faces Probe From Competition Watchdog

LONDON – The U.K. competition regulator will conduct a review of the music streaming business, looking at any possible competition concerns related to the major labels’ dominance of the industry, and how they may be leveraging that power at the expense of artists, independents and consumers.

The review follows a stinging report by a Parliament committee in July that recommended a “complete reset” of the streaming business, arguing it was unsustainable in its current form.

Andrea Coscelli, the chief executive of the Competition and Markets Authority (CMA), said Tuesday (Oct. 19) that the regulator’s first task is to undertake “detailed further work” to define the scope of the inquiry before a market study of the U.K. streaming business is formally launched, which she said would be done “as soon as practically possible.”

The Digital, Culture, Media and Sport (DCMS) Committee has raised concerns about how the dominance of Universal Music, Sony Music and Warner Music was “distorting the market” and that the benefits of the music streaming boom were not being passed on to musicians.


In the U.K., the three majors make up 75% of the recorded music market, with independents accounting for the remaining 25%, according to the Association of Independent Music (AIM). Streaming now accounts for four-fifths (80.6%) of all music consumption in the U.K., according to labels trade body BPI.

“The U.K. has a love affair with music and is home to many of the world’s most popular artists,” said Coscelli. “We want to do everything we can to ensure that this sector is competitive, thriving and works in the interests of music lovers.”

She said a market study will help the CMA understand the “radical” changes the music industry has undergone over the past decade and “build a view as to whether competition in this sector is working well or whether further action needs to be taken.”

Some U.K. music industry figures welcomed the decision to conduct a review. “The power of the major music groups is nothing new, but the willingness to question their size, practice and dominance is,” said Crispin Hunt, chair of The Ivors Academy, a London-based association of music writers. “The music market has evolved, but music’s economic models have not.”

The regulator’s action “marks a crucial step towards creating a fairer and more transparent UK music landscape,” said Naomi Pohl, deputy secretary general of the Musicians’ Union.

CMA market studies examine why particular markets may not be working well for consumers and can take up to 12 months to complete. They can result in a range of outcomes, including recommendations to the government to change regulations, or consumer or competition law enforcement action.


A market study could also lead the CMA to encourage businesses to self-regulate or to launch a full-market investigation lasting up to 18 months. The outcome label bosses will most want is to receive is a “clean bill of health,” which requires no further scrutiny.

A spokesperson for the British Phonographic Industry (BPI) said they welcomed the CMA’s study into music streaming and would engage with the regulator “to inform its work.”

Concerns around hyper-concentration of power by the majors and the dynamic between music and technology companies are some of the topics “that could well benefit from this CMA market study,” said Paul Pacifico, CEO of the Association of Independent Music (AIM).

The launch of a market study into the streaming sector is the latest in a series of probes that the CMA has launched into the music business. The committee exists independently from the British government and has the power to bring criminal proceedings or to force divestments in instances where businesses are abusing dominant positions.

In September, it opened an “in-depth” phase two investigation into Sony’s $430 million acquisition of Kobalt Music Group’s independent distribution and label division AWAL. The CMA also conducted an in-depth 20-month merger investigation into ticketing company Viagogo’s $4 billion acquisition of StubHub.

In that instance, the CMA found that the merger resulted in a “substantial lessening of competition” and ordered Viagogo to offload its StubHub business outside of North America. Viagogo sold the assets to Boston private equity firm Digital Fuel Capital last month for an undisclosed sum.

UPDATE: This article was updated on Oct 19 at 5:38 p.m. EST to include more responses from the U.K. music industry.