Book review: Competition Policy and the Music Industries

This is a book review of Competition Policy and the Music Industries, A Business Model Perspective by Jenny Kanellopoulou, Senior Lecturer in Law at Manchester Metropolitan University whose research focuses on intellectual property and competition policy. 

 

The book, Kanellopoulou explains in the introduction, was inspired by the 2010 merger of Live Nation and Ticketmaster to form Live Nation Entertainment Inc., the world’s first fully vertically integrated provider of live music entertainment. She goes on to say that whilst the merger was met with outcry from artists, consumers, and academics alike, nothing appeared to be technically wrong, from a legal perspective, with the Department of Justice’s (DOJ) decision to clear the merger. However, she reveals, a closer look at the letter of the investigation shows a “struggle” on the part of the DOJ to read through the shape that the music industries had been taking at the time. In which market would the two companies pose a threat to competition? Do they even operate in the “music industry” given that this name has traditionally been affiliated with the recorded music sector? What products do they even offer?

These are questions that were raised again recently by the artists and songwriters, who expressed similar frustrations at the Competition Markets Authority update report on its Music Streaming investigation. The report stated that its initial analysis indicates that the market is delivering good outcomes for consumers and is therefore not planning on launching a full investigation into the music streaming market. 

In her book, Kanellopoulou argues that, in a strictly legal, antitrust context, the end consumer is mostly absent from the supply chain for music. She provides a digestible explanation of the evolution of the music industry vis-à-vis the competition authorities in the US, the UK, and Europe, asking: What do consumers value when it comes to music and who delivers it to them? Is there a need for intervention in the music industries in terms of competition policy, and if so, how is this intervention justified?

Discussion of these questions is presented in six chapters. In chapter one, Business Models for the Music Industries, Kanellopoulou, first addresses the question of whether there is a role for competition policy in the music industries?

The traditionally unregulated environment of the music industries could benefit from some instances of intervention. I believe that this intervention should be left to antitrust, since this area of policy and law-making has been unsuccessful in its encounters with the music industries, leading to the recycling of a consolidated landscape.

She goes on to explain that attempts to regulate the music industries via copyright have been controversial and attempts to enforce copyright online have proven unpopular, even futile. This is discussed in more detail in chapter two, The Copyright Story of a Business Model, which provides an overview of the recorded music industry until the Second World War.  The period following the Second World War is addressed in the third chapter, Business Models and the role of the End Consumer in the Music Industries. The chapter demonstrates how the music industry moved from a traditional old model and industrial order to an era of consumer-led change and innovation, which requires the design of new policies. 

Building on this context, the book then turns to examine the evaluation of the music industries by the relevant competition authorities through the years, with particular emphasis on merger control, as this area of antitrust is quite revealing in terms of relevant product market definition. Chapter four, Intervention by Proxy?, examines the ex post, and chapter five, Investigating Business Models and Merger Control in the US and the EU, the ex ante, attempts to define markets and assess competition in the music industries in antitrust. 

These chapters aim to scrutinise how the dominant business model of the music industry was perceived by the competition authorities and the courts (US and EU) in the relevant market investigations (UK) and merger cases (EU and US). In doing so Kanellopoulou argues that the authorities failed to identify the bottleneck created around the provision of the music product, leaving the end consumer disenfranchised, even though this issue only became apparent after the induction in the digital era, an era marked by market failure.

In the final chapter, Concluding Remarks and Further Reflections, two prominent themes are reflected upon; the safeguard of consumer welfare and the promotion of competition and innovation. Kanellopoulou concludes: “Ultimately, this work has shown that when the narrative excludes the end consumer, so does the benefit of competition. This is true in not only the assessment of the creative or the music industries, but also in a market economy as a whole.”

This book would appeal to those interested in the intersection between copyright and competition law, in particular relating to the music industry. 

Published 2022 by Routledge

200 Pages

Available in hardback and ebook 

ISBN 9780367242619