Senators Voice Concerns Over UMG-EMI Deal In FTC Letter
August 6, 2012
The heads of the U.S. Senate Judiciary Subcommittee on antitrust issues have sent a letter to the Federal Trade Commission, voicing their concerns over the Universal Music Group acquisition of EMI. In the letter, sent Friday to the FTC, the Senators say that the UMG-EMI deal "presents significant competition issues" and asks that the agency closely examine the sale before making a ruling.
The New York Times reports that the letter was signed by Sen. Herb Kohl (D-WI), Chairman of the subcommittee, and its ranking minority member, Mike Lee (R-UT). The senators wrote that "We believe this proposed acquisition presents significant competition issues that merit careful FTC review to ensure that the transaction is not likely to cause substantial harm to competition in the affected markets."
They added, "In the course of this review, we also urge the commission to be mindful of the changes in the music industry in the last decade, particularly the shift to online distribution as the preferred way consumers purchase music."
In response to the senators’ letter, Universal released a statement saying, "We appreciate the points raised in the joint letter from Chairman Kohl and Ranking Member Lee, as well as the committee’s recognition of the historic changes in the music industry over the past decade. Since this deal was announced, we have worked closely with the Federal Trade Commission to address many of these issues, and will continue to do so. Our investment in EMI will create more opportunities for new and established artists, expand music output and support new digital services. We remain confident of earning regulatory approval."
Meanwhile in the UK, the Telegraph has acquired a copy of the EU regulators' questionnaire about the UMG-EMI merger. The questionnaire was sent to Universal's music industry competitors as part of the European Commission's analysis of the deal. According to the Telegraph, the regulators are asking if UMG's latest concessions in the deal are enough to satisfy their competitors. If too many companies object to Universal's divestment plan, it could delay approval of the sale even further. The EU regulators' deadline to make a decision was recently moved back from September 6 to September 27.