Who owns the stage? A look at music industry monopolies: part three
Hello and welcome to the latest edition of The Counterbalance, published early on a Wednesday. This week, we’re finalising our three-part series on monopoly power in the music sector.
Last week’s edition of The Counterbalance cast a spotlight on the overwhelming dominance of powerful labels and streaming platforms in the music sector, revealing how their grip squeezes out independent creators and flattens diversity.
But awareness alone won’t dismantle these structures. Regulatory urgency and action are necessary if the music sector is ever going to break free from monopolistic power structures.
Left unchecked, the consolidation of market power in this sector will continue to inflate profits for the powerful few while — quite literally — denying the world at large the joy of the fruits of their labour. The remedy is a combination of effective regulation, enforcement of competition laws and artist empowerment.
In the UK, the Department for Culture, Media and Sport proposed last year to extend the UK’s equitable remuneration regime to performers and the music market. However, despite public support for this measure, progress has been slow.
“The purpose of this work was not to conclude or provide specific recommendations, but rather to frame a range of disparate discussions on a consistent basis…and to lay the foundation for future research,” an executive summary of the project reads.
In Europe, significant progress has been made under the EU’s marquee Digital Markets Act. YouTube — and even TikTok, where many artists are first discovered — fall under parent companies officially designated as “gatekeepers” under the legislation.
However, blind spots persist. The DMA may have rightly designated Big Tech firms like Alphabet and ByteDance as gatekeepers, but the definition does not effectively capture platforms in areas including AI.
This limits the law’s ability to address future sources of monopoly or dominant power in a music sector that is increasingly influenced by emerging tech. Europe should fully deploy its tools to ensure it is not always playing catch up to regulate the harms of Big Tech’s outmanoeuvring business models.
In contrast in the US, the risks of allegedly anti-competitive behaviour were recognised when the Department of Justice — along with 30 state and district attorneys general — filed a potentially watershed lawsuit to break up Live Nation-Ticketmaster.
“It is time to break up Live Nation-Ticketmaster,” said Attorney General Merrick B. Garland at the time, adding that “fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services.”
While the case remains open, the challenge against Ticketmaster provides an example of how the same logic can apply to labels owning stakes in streaming services, influencing everything from promotion strategies to playlists.
Lawsuits such as this are vital if the music sector is going to be freed from the vice grip of monopolists, but by themselves they are insufficient.
It’s time for equitable remuneration and effective regulation so that consumers can decide for themselves — not algorithms — what to listen to.
Some artists are already fighting back. Last week, Professor of Competition Policy at the University of East Anglia Amelia Fletcher called on DG Competition to object a proposed $775 million acquisition of Downtown — an independent provider of distribution services in the industry — by UMG. European regulators are set to rule on the proposed deal next month.
“You may never have heard of Downtown, but it is an important player in the independent music ecosystem,” Professor Fletcher — who founded an independent record label and who has also been in several independent bands, including Talulah Gosh, Heavenly, and Tender Trap — said earlier this week on LinkedIn.
“I am concerned that the merger represents another step in UMG’s apparent strategy of undermining the vitality and viability of the independent music sector. This would be bad for competition, but also for consumers, culture and growth,” she added.
Professor Fletcher’s words (and letter, which you can read here) is a useful reminder that these issues are not just confined to niche policy circles.
The music sector is at a cultural crossroads where all stakeholders must decide whether to permit a handful of corporations to own the future of the industry, or demand meaningful reforms that democratise the industry for society writ large.
Highlight: People vs Big Tech
The Break Up Big Tech Campaign today handed over more than 116,000 petition signatures to the European Commission, calling on the block to break up Google ahead of its “major ruling on Google’s toxic online advertising monopoly.”
“Google’s monopoly power rips off consumers, pollutes our information environment, and destroys the news media. A US judge recently ruled that it is illegal. Now it’s time for [Europe] to act!”, the group said on a post on social media platform Bluesky.
Alongside the signatures, People vs Big Tech also launched a new declaration calling on the EU to “resist threats” from Trump and confront Big Tech companies threatening our democracy — the declaration has been signed by 35 civil society organisations, including Balanced Economy Project, as well as People vs Big Tech, LobbyControl, WeMove Europe, Rebalance Now, and Avaaz.
Weekly news recap:
US regulators are considering whether Google’s proposed acquisition of Wiz — a cybersecurity and cloud tech company — would violate antitrust laws and limit competition in the marketplace. The deal is valued at roughly $32 billion dollars and, if successful, would become the largest acquisition ever closed by Google’s parent company, Alphabet.
The Federal Trade Commission is also tied up on a proposed merger involving major advertising companies Omnicom and Interpublic, and according to a Reuters report, may impose conditions preventing the combined company from “boycotting ads on platforms because of political content.”
Soundbite of the week: OpenAI’s deteriorating relationship with Microsoft
OpenAI executives are considering hitting out at Microsoft — a major backer of the company — for allegedly anti-competitive behaviour, according to a Wall Street Journal article published earlier this week.
The strategy, according to people familiar with the matter, might even include seeking a federal review of the terms of OpenAI’s contract with the tech giant.
“OpenAI’s executives have discussed what they view as a nuclear option: accusing Microsoft of anti-competitive behaviour during their partnership, people familiar with the matter said. That effort could involve seeking federal regulatory review of the terms of the contract for potential violations of antitrust law, as well as a public campaign, the people said.”
The Counterbalance is published every Thursday. Please send any thoughts and feedback to scott@balancedeconomy.org.