The UK’s antitrust watchdog will take a close look at the music streaming market.
Today, the Competition and Markets Authority (CMA) announced that it will conduct a market study on music streaming as soon as possible, its latest work aimed at expanding competition in digital markets.
It uses market research to identify competition and consumer issues and, if necessary, to research the best way to resolve the issues.
The development could have implications for how mobile app stores and music streaming giants like Apple Music and Spotify can operate in the UK in the future – if the CMA decides it needs to step in and impose corrective actions.
The exact scope of the study has yet to be determined, but in a letter to MPs, the regulator said it would prioritize the work – writing:
“On October 13, the Council examined the first proposals to carry out a project of markets on streaming music. They agreed that work in this area was in line with the CMA’s prioritization principles and supported a CMA strategic goal of fostering effective competition in digital markets, ensuring that they function. so as to promote innovation and consumer interest. On this basis, the Council agreed that it was useful to take a market study forward. They also agreed, in light of the concerns you have collectively expressed, that this work should be prioritized: that is, it should be the next market study that the CMA will launch. CMA staff will now prioritize further more detailed work to refine and define the scope of this project. This will be reviewed again by the Council, with a view to formally starting the market study as soon as possible.
The move follows a report by a parliamentary committee this summer that identified concerns about the economics of the music streaming market – such as the possible dominance of major music labels and the potential for contractual deals between them and the services. streaming that could stifle innovation.
Last month, in its response to the DCMS select committee report, the government asked the AMC to examine the market economy in order to address concerns about transparency and fairness.
In a statement today, Andrea Coscelli, CEO of CMA, said:
The UK has a love affair with music and is home to many of the world’s most popular artists. We want to do everything we can to ensure that this sector is competitive, prosperous and works in the interest of music lovers.
Over the past decade, the music industry has evolved in almost unrecognizable ways, with streaming now accounting for over 80% of all music listened to in this country. Market research will help us understand these sweeping changes and determine whether competition in this industry is working well or whether further action needs to be taken.
The AMC is expanding its knowledge base on all things digital and is expected to play an increased role in overseeing the digital sphere as the government reforms digital competition rules to address concerns about the impact of giants of technology.
A digital markets unit has already been set up within the regulator – pending legislation to establish its full powers. But the CMA did not sit back and wait for the government to adopt reforms.
He has previously conducted a study of the online advertising market – which has led to the identification of a series of concerns which appear to be informing the government of the overhaul of digital competition rules in the UK.
He also stepped in and put a regulatory brake on Google’s plans to phase out third-party tracking cookies – garnering commitments from the tech giant on how its ‘Privacy Sandbox’ alternative would work. This investigation is still ongoing.
Earlier this year, the CMA also opened a market study on Apple and Google’s dominance in the mobile ecosystem. And the Apple App Store is simultaneously under investigation by the regulator.
On the music streaming front, European Union regulators are a little ahead of their British counterparts. In April, the Competition Commission charged Apple with an antitrust violation related to competition in the music streaming services market.
European music streaming rival Spotify had long complained that Apple’s terms and conditions were “unfair”, although EU competition chief Margrethe Vestager said his case did not concern not Spotify – claiming it was more about the terms Apple places on all music streaming providers. who try to reach customers through its App Store.
Since the EU has identified concerns, it’s a safe bet that the CMA market research will also find issues to be addressed.
But it remains to be seen what the UK regulator can suggest if it runs into problems – with a range of possible outcomes at its disposal, such as making recommendations to the government to change regulations or public policy; encourage the companies concerned to self-regulate; take consumer or competition law enforcement measures against businesses; or the opening of a more in-depth market investigation.