Universal’s EMI Takeover Probed By EU

AAn in-depth probe of Universal Music Group’s (UMG) planned acquisition of part of EMI has been launched by the European Union’s competition regulator, the Guardian has reported.

UMG is set to buy EMI‘s recorded-music division, while Sony has bid for EMI’s publishing arm.

The European Commission will decide later in the year whether the buys can go through.

UMG

The sales have been met by opposition from within the music industry, with rivals Warner Music and several independent labels voicing their disapproval.

Warner Music Group (WMG) will lobby in the USA and Europe against UMG’s acquisition of EMI’s recorded-music division. This comes after WMG’s unsuccessful bid for EMI.

They fear that the sales will further saturate an industry currently struggling because of illegal downloads.

The European Commission has released a statement in which these concerns are taken seriously.

The takeover would result in UMG being more than twice as large as its nearest competitor in Europe.

The regulator said that customers, competitors and piracy will not create satisfactory constraints on UMG’s market power. This is a blow to UMG, amid reports that it is set to argue that online retailers, such as Amazon and iTunes, have greater power in price-setting.

IMPALA, an Independent Music Companies Association, has since released a statement welcoming the regulator’s probe into UMG’s acquisition of EMI’s recorded-music division.

Helen Smith, Executive Chair at IMPALA, said, “Above all, the regulators will want to ensure more choice for artists and consumers, who also need to be protected from price increases.

IMPALA

“They will also be keen to ensure that online services can develop free from excessive constraints, to help the sector overcome piracy and allow citizens access to music on fair and reasonable terms.

“They will also want to make sure that in the future, independent artists like Adele and many others continue to flourish as they always did.”

IMPALA was established in April 2000 to represent independent music companies.

Meanwhile, Bloomberg has reported that UMG will sell off three music-publishing catalogs to finance its acquisition of EMI’s recorded music division.

This comes after UMG pledged to raise the money for the acquisition by selling assets including real estate.