Senate plans UMG-EMI hearing

Judiciary Committee hearing to be chaired by Sen. Herb Kohl

The Senate Judiciary Committee plans to hold a hearing on Universal Music Group’s pending acquisition of EMI Music’s label holdings.

The hearing, to be chaired by antitrust subcommittee chairman Sen. Herb Kohl (D-WI), will likely take place this summer, according to Reuters.

The Federal Trade Commission and the European Commission are currently investigating UMG’s $1.9 billion purchase of the EMI labels.

Last month, the EC gave its blessing to the $2.2 billion acquisition of EMI’s publishing assets by an investor consortium led by Sony/ATV (Daily Variety, April 20).

In late April, the Consumer Federation of America and Public Knowledge, a digital rights org, sent a nine-page letter to members of the Senate antitrust subcommittee that the UMG-EMI deal raised anticompetitive concerns in the digital distribution marketplace.

The letter said, “Even if the FTC does not believe that a 40+% market share alone gives a single company the power to determine the life or death for these emerging models, it certainly makes it very easy for that company to lead the effort to do so. With a post-merger three-firm market share of 90%, and with one or two companies following the lead of the dominant firm, the market would be vulnerable to anticompetitive harm resulting from conscious parallelism.”

UMG said in a statement Friday, “We welcome the opportunity to answer any questions that the subcommittee may have, address the facts and debunk myths. Universal Music is committed to reinvesting in EMI to create even more opportunities for new and established artists, expand the marketplace with more music and support new digital services. We remain confident of regulatory approval.”