CMA plans probe into music streaming market

• Latest step in CMA’s push to increase competition in digital markets.

Following discussion by the CMA Board, the Competition and Markets Authority (CMA) will now carry out work to consider and develop the final scope of the market study, before formally launching it as soon as possible.

The CMA has written to the Government and the Digital, Culture, Media and Sport Committee to outline its intended next steps.

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, thriving and works in the interests of music lovers.

Over the past decade, the music industry has evolved almost beyond recognition, with streaming now accounting for more than 80% of all music listened to in this country. A market study will help us to understand these radical changes and build a view as to whether competition in this sector is working well or whether further action needs to be taken.

Market studies are a key tool used by the CMA to identify – and, if appropriate, to consider how best to tackle – any competition and consumer issues.

The CMA has a number of ongoing pieces of work promoting competition in digital markets. These include investigating Google’s ‘privacy sandbox’, Facebook’s use of ad data and Apple’s AppStore. It also launched the Digital Markets Unit (DMU), in April, which is operating in shadow form pending legislation that will provide it with its full powers. Separately to the proposed market study, an independent CMA panel is investigating Sony’s completed acquisition of ‘artist and label’ services provider AWAL.

1. Market studies examine why particular markets may not be working well for consumers. They may lead to a range of outcomes, including: a) making recommendations to the Government to change regulations or public policy; b) encouraging businesses in the market to self-regulate; c) taking consumer or competition law enforcement action against firms; d) making a reference for a more in-depth (phase 2) market investigation; e) “clean bill of health”.
2. The CMA’s letter responding to the Government and DCMS Select Committee can be found on Letter from Andrea Coscelli to Julia Lopez MP, Julian Knight MP and George Freeman MP on music streaming. Further correspondence between the CMA and the Government regarding music streaming.
3. More information on the CMA’s approach to market studies can be found on the Market studies and investigations - guidance on the CMA’s approach: CMA3 guidance page.
4. The DMU will oversee a new regulatory regime for the most powerful digital firms, promoting greater competition and innovation in these markets and protecting consumers and businesses from unfair practices.
5. According to BPI – the British recorded music industry’s trade association – streaming now accounts for four-fifths (80.6%) of UK music consumption.