EMI-Universal: Statment of objections announced
By Sophie Mosca | Monday 11 June 2012
The European Commission plans to move up a gear in its probe into the proposed acquisition of the music business of Britain’s EMI by Universal Music, a Vivendi (France) subsidiary (see
Europolitics 4369). Competition Commissioner Joaquin Almunia announced, on 8 June at a forum in Switzerland, that he is preparing to publish his formal statement of objections.
“We opened our in-depth investigation in March and we are preparing to move into the next stage,” said Almunia. “We have to make sure that in this highly concentrated market the company that will result from this transaction will not be in a position to reshape the digital music market to the detriment of users and artists,” he explained.
Announced on 23 March (4393), this in-depth probe aims to assess the impact on competition of the €1.5 billion deal on both the physical recorded music market and on the digital market. Universal holds around 26.5% of the global recorded music market and the addition of EMI’s activities would give it control over more than 50% in a number of member states, including France, where its market share would be over 55%. In certain segments like jazz or classical music, its share may even reach nearly 70%, a level never before reached in the music industry.
Universal finds that the threat of music piracy justifies the merger and “has made no concrete concessions to date,” according to an informed source. This failure to make concessions has annoyed the Commission from the start and is expected to be mentioned in its objections.
Independent labels in the sector fear that the merged entity’s commercial clout will endanger existing and future agreements with artists and downloading platforms. Impala, which represents independent music producers in Europe, reacted positively to the commissioner’s announcement: “We welcome this news and expect a strong statement of objections that confirms the Commission’s initial conclusions, namely that Universal represents a danger for both the physical and digital markets”.
Universal commented that the statement of objections makes up part of the usual merger review process. “When we receive the statement of objections, we will prepare a detailed response to the Commission, in which we will address all the concerns mentioned in the document,” said its spokesman. Possible concessions by Universal could include the disposal of small labels.
The statement of objections could extend by four months the initial 6 September date set for the Commission’s decision.