In the wake of Friday’s commitment to European concessions by Universal Music Group, U.S. indie org the American Assn. of Independent Music has renewed calls for Stateside divestments in the UMG buy of EMI Music’s labels.
A remedies package submitted to European Commission regulators calls for the sell-off of significant EMI label holdings in Europe, including the 89-year-old flagship imprint Parlophone, as well as UMG’s catalog label Sanctuary (Daily Variety, July 30).
In a Monday statement, A2IM prexy Rich Bengloff suggested that in the absence of similar moves in the U.S., the purchase should be blocked by the Federal Trade Commission, which is charged with approving it.
The A2IM represents some 350 U.S. independent music firms. Beggars Group CEO Martin Mills, who testified in opposition to the UMG-EMI splicing at a June Senate antitrust subcommittee hearing in Washington, is a member of the group’s board of directors.
Vocal opposition to the merger by A2IM’s U.K. sister org AIM and Euro indie unit Impala prefaced the EC’s 200-page summary of objections, which led to the large concessions package brought on Friday.
Bengloff urged the FTC to seek similar concessions.
He said, “With no divestitures or operating remedies proposed for the U.S. — the world’s largest music market and home to the vast majority of the technology companies who work with the music community — the negative impact on music consumers and emerging technology companies is clear. Such market concentration will diminish healthy competition, providing one dominant market leader damaging clout in terms of both consumer pricing and the means with which music is made available.”
Bengloff added, “Approval of such an acquisition with no U.S. remedies will further constrain our resources (with higher potential distribution fees and less money available to create diverse music for consumers both very probable)… (G)iven Universal’s penchance to monopolize the marketplace, we call on the FTC to take the required steps to insure that this transaction is blocked so that it does not move forward.”
A UMG spokesman said, “Rich Bengloff clearly does not speak for the many indie labels and artists who have come out publicly in support of the deal. There is growing recognition that Universal Music’s investment in EMI will create more opportunities for new and established artists, expand music output and support new digital services. Barriers to entry have evaporated in today’s digital environment and there are more ways than ever for labels and artists to get their music out to fans. We are working with regulators around the world and are confident of winning approval.”