The British competition regulator CMA has raised concerns about the acquisition of AWAL, a service provider for independent artists and indie labels, by Sony Music.

Sony had acquired AWAL together with an agency for the management of performance rights from the British music company Kobalt at the beginning of the year and paid it a total of 430 million dollars.

Benjamin Fischer

Editor in business.

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The "vast majority" of music distribution in the UK market goes through the three majors - Universal, Sony and Warner Music, according to a CMA statement on Wednesday.

AWAL is an “important up-and-coming player” and the continued competition between Sony and AWAL could have benefited artists - for example with a view to higher royalties or the assignment of music rights within the framework of a contract.

The authority is therefore concerned that the "loss of an innovative competitor like AWAL", despite competition from the other two majors, could lead to worse conditions for artists and less innovation in the music industry.

Artist & label services increasingly popular

Sony must respond within five working days of the September 7th deadline, otherwise the case will be investigated in more detail in a second phase. A Sony spokesman told British industry media: "The CMA's decision is irritating and is based on a misunderstanding of AWAL's position in Great Britain." Sony is convinced that the takeover will further fuel competition and is a key to further growth . In addition, no other competition authority has expressed concerns about the takeover. They will continue to work closely with the CMA to resolve all questions.

Sony Music is the second largest music company in the world, behind Universal Music and ahead of Warner Music. In addition to the original label business, all three have also expanded artist & label services in the past - from sales to marketing or product management - for artists who want to remain more independent and for indie labels. In the course of digitization, it has become much easier for artists to take on some tasks themselves or to commission individual partners for different areas instead of signing a classic label contract. Sony had already completely taken over the provider The Orchard in the service field in 2015.

The notification from the supervisory authority also refers to the report of a parliamentary committee that had dealt with the situation on the music market, which is dominated by streaming, over the past few months. Last but not least, he had called for an investigation into the market power of the three majors.