Decision Nº M/10/045 from Competition and Consumer Protection Commission, 2011-01-18

• Jurisdiction: Ireland
• Parties: BMG RM Investments Luxembourg S.á r.l.,Chrysalis plc
• Date: 18 January 2011
• Decision Number: M/10/045
• Decision Date: 18 January 2011
• Court: Commissioner for Environmental Information

Merger Notification No. M/10/045 – BMG/Chrysalis

DETERMINATION OF MERGER NOTIFICATION M/10/045 -

BMG/Chrysalis

Section 21 of the Competition Act 2002

Proposed acquisition by BMG RM Inve stments Lux embourg S.a.r.l. of

Chrysalis plc.

Dated 18 January 2010

Introduction

1. On 20 December 2010, in accordance with section 18 of the

Competition Act 2002 (the “Act”), t he Competition Authority (the

“Authority”) received a notification of a proposed transaction whereby

BMG RM Investments Luxembourg S.a.r.l. (“BMG”) woul d acquire,

through its wholl y-owned subsidiary Forte Bidco 1 Limited, sole control

of Chrysalis plc (“Chrysalis”).

The Undertakings Involved

The Acquirer

2. BMG is an international group of companies acti ve in music publishing

1

and recorded music

2

.

3. BMG has a licensing arrangement with Sony Music Entertainment UK

Limited (“Sony”) for the exploi tation of BMG’s recorded music rights in

relation to certain music catalogues in the State. Effecti vely this

means that Sony coll ects royalties from the Iri sh collecting societies

3

in

relation to this music catalogue.

4

The revenue generated by BMG in

relation to thi s licensing arrangement is considered by BMG as

turnover generated in the United Kingdom.

4. BMG had a similar licensing arrangement with Kobalt Music Group

(“Kobalt”) in relation to BMG’s music publi shing rights

5

that expired on

1

The European Commission (the “Commission”) has defined music publishing as the exploitation

of intellectual property rights of song writers [Case M4404 Universal/BMG Music Publishing

paragraph 12]. Furthermore, the Commission has stated that: “the activities of a music publisher

are two-fold (i) the downstream activity of exploiting the works of authors under contract; and (ii)

an upstream activity of signing authors and providing them with financial and marketing support

as a counterpart to the transfer of their musical works” [Case M.5533 Bertlesmann/KKR/JV

paragraph 31].

2

Recorded music is an activity that op erates downstream of music publishing and as defined by

the Commission “encompasses the discovery and development of artists and the promotion,

marketing and sales of their sound recordings as well as the exploitation of rights in the sound of

an artist’s performance.” [Case M.5533 Ibid paragraph 40]

3

Irish collecting societies such as Irish Music Rights Organisation (“IMRO”).

4

The licensing arrangement between BMG and Sony commenced in October 2008 and is for […]

years.

5

These music publishing rights include (i) mechanical rights (for reproduction in sound recordings,

e.g. on CDs), (ii) performance rights (for TV, radio, live performance), (iii) synchronisation rights

(for synchronisation of music with visual images), (iv) print rights (for reproduction on music

sheets), and (v) online rights (for online exploitation).