20. Overall analysis

  1. The Commission collected from the four majors data related to all transactions of chart albums between January 2002 and June 2006 with their main 20 customers in the 15 affected national markets
  2. Chart albums are single-pocket CDs which have been in the national charts at any point of their lifetime during that period. For each transaction, the majors have provided information on the title transacted (such as the artist name, the title of the CD, its release date and the format of the final product), on the customer (such as its name, the category in which it competes at the retail level), on the terms of the transaction (such as the nature of the transaction . sale or return, the invoice date, the gross price . PPD, the number of units sold or returned, the net price, the discount granted and, when available, the split between file discount and campaign discount), as well as the context of the transaction (such as the presence of the title in the chart at the date of transaction). Accordingly, the analysis performed in the course of this investigation is based, among other things, on a more detailed and representative dataset.
  3. The different theories of harm analysed afterwards have been rejected under both evidences that (i) the terms of coordination leave significant flexibility so that they are not compatible with tacit coordination; and (ii) that there is not sufficient transparency on the market for recorded music to verify that allegedly colluding major recording companies comply with the terms of coordination. In addition, the Commission has investigated the current market structure where the merger between Sony and BMG was already implemented one to three years ago depending on the territory.
  4. The Commission received a submission stating that the current concentration leads to a market with two leaders (Sony BMG and Universal), that are clearly ahead of the other majors (EMI and Warner) and the independents, which is therefore conducive to a market structure where collusion could take place at the level of the two leaders only. It should first be noted that according to that theory, EMI and Warner would still remain significant ’mavericks’ and would still have the power to jeopardy any attempt of collusion by the two other majors alone. In addition, the various theories of harm have been rejected on grounds that would equally apply to a collusion of two or four majors. Therefore there is no need to particularly address a theory under which collusion would only take place between the two largest majors.

This item is part of the series of posts based on the European Antitrust Agency 2007 Music Industry Analysis for the Sony BMG Case. It’s home page is here.

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