Wednesday, 28 March 2012

EMI sale raises more competition issues

Whilst its rumoured that Universal Music may well be selling some of their music publishing catalogues to fund their planned purchase of EMI's recorded music divisions, UMG has so far resisted the temptation to offer concessions to competition regulators in Europe during the European Commission's initial investigation into the proposed acquisition. However, Sony/ATV has apparently offered concessions in a bid to allay fears about its acquisition of the EMI music publishing business. Sony/ATV (Sony own the company along with Michael Jackson's estate) is leading a consortium of investors to buy EMI Music Publishing, which is likely to remain a separate entity if the takeover goes ahead - but even an independent EMI would still report into Sony/ATV's management. The EC confirmed Sony/ATV had offered concessions yesterday, but gave no details as to what exactly they were. The regulator added that the proposals would push back its phase one investigation into the Sony deal until 19th April, when it will announce whether the Sony-led consortium has won approval, or whether a full three month inquiry will be required for this deal too.

Meanwhile, in the US, California's Attorney General Kamala Harris has reportedly started making her own inquiries into the two EMI deals, separate from the ongoing competition investigation being conducted in the US by the Federal Trade Commission. According to Bloomberg, Harris's office has made contact with various people and organisations likely to be affected by the deal, though it's not clear to what end, or what power the Attorney General would have to hinder any deal-making if both transactions were approved at a federal level. And the Commerce Commission in New Zealand has invited interested parties to make submissions to its inquiry into Universal Music's proposed takeover of the EMI record companies. Areas on which the Commission says it will be focusing include Universal's claims that the independent sector in New Zealand currently enjoys a strong competitive position, the extent to which artists can now circumvent the label system, and the extent to which piracy limits the big rights owners' power in setting prices, especially in the digital domain. A final decision is due on 13 May although the European Commission has said that it will need until August to review Universal's EMI bid. In Europe the acquisition is being strongly opposed by pan-European indie label trade body IMPALA, while Warner Music is thought to be lobbying against the deal in both the US and Europe.

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