In the latest round of foreign antitrust scrutiny, the European Commission has presented its objections to Universal Music Group’s pending $1.9 billion acquisition of EMI Music’s label assets.
Specifics of the antitrust objections remained unclear late Tuesday, for the European regulatory body had issued no formal public statement regarding its issues with the purchase. But UMG acknowledged the EC’s move in a statement issued Tuesday.
“As part of the European Commission’s customary process when considering mergers, they have provided us with a statement of objections,” UMG said. “We are preparing a detailed response to the Commission’s statement, which will address the concerns outlined in this procedural document. We will continue to work closely with the Commission and look forward to securing regulatory clearance.”
EC commissioner Joaquin Almunia expressed concerns about the market power of a spliced UMG and EMI during a speech before a competition law forum in Switzerland last week.
“Ultimately, we will need to make sure that, in this already concentrated market, the company that would emerge from the deal would not be in a position to shape the future landscape in the digital music market to the detriment of users and artists,” Almunia said.
The EC’s move, which was anticipated, came two days before a scheduled Thursday hearing about the UMG-EMI splicing before the Senate Judiciary Committee’s antitrust subcommittee (Daily Variety, May 12). The Federal Trade Commission is investigating the deal Stateside.
Led by the Euro indie trade group Impala, opponents to the purchase have claimed that a combined UMG-EMI would result in an anti-competitive tilt in the music marketplace.
Similar concerns were voiced over the $2.2 billion acquisition of EMI Music Publishing by a consortium led by Sony/ATV.
However, that deal — which would result in a company controlling about a third of the pub biz — was approved by the EC in April, after the buyers agreed to sell off several publishing catalogs (Daily Variety, April 20). The pubbery buy is also being weighed by the FTC here.