The competition regulator in the UK has officially launched a study into the music streaming market in the country.
The news confirms the Competition and Markets Authority’s (CMA) announcement in October that it intended to do so, following the UK government’s response to a report about the economics of streaming.
That report included a suggestion that the CMA should decide whether or not to conduct a new market study into streaming, and the power of the major record companies.
The regulator says that its newly-launched study will pay “particular attention” to the roles played by both record labels and music streaming services.
Additionally, the CMA says that it will “consider whether innovation is being stifled and if any firms hold excessive power”.
The CMA defines market studies as an instrument to “examine why particular markets may not be working well for consumers”.
As noted by MBW in October when the CMA announced that it planned to move forward with the study, a ‘market study’ is a softer option than an investigation, which is what the CMA is currently, and separately, conducting into Sony Music’s acquisition of AWAL.
The CMA says that while “focussing on potential harm to consumers”, it will also “assess whether any lack of competition between music companies could affect the musicians, singers and songwriters whose interests are intertwined with those of music lovers.”
If the CMA finds anything that perceives to be a problem, it says it will consider what action may be necessary.
The study could result in a range of different outcomes, including: a) making recommendations to the government to change regulations or public policy; b) encouraging businesses in the market to self-regulate; c) taking consumer or competition law enforcement action against firms; d) making a reference for a more in-depth (phase 2) market investigation; e) “clean bill of health”.
The CMA is required to publish a market study report within 12 months, explaining its findings and the action (if any) it proposes to take.
“As we examine this complex market, our thinking and conclusions will be guided by the evidence we receive.”
Andrea Coscelli, CMA
Andrea Coscelli, Chief Executive of the CMA, said today: “Whether you’re into Bowie, Beethoven or Beyoncé, most of us now choose to stream our favourite music.
“A vibrant and competitive music streaming market not only serves the interests of fans and creators but helps support a diverse and dynamic sector, which is of significant cultural and economic value to the UK.
“As we examine this complex market, our thinking and conclusions will be guided by the evidence we receive.”
In response to today’s announcement, a spokesperson for the BPI – the UK trade body representing the major record companies – said: “Streaming has led to an explosion of choice for music fans and creators in the UK.
“The BPI looks forward to engaging closely with the CMA to help it understand the changes that streaming has brought to the music market.”Music Business Worldwide
