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EC sends out new questionnaire over Universal’s EMI bid

By | Published on Wednesday 25 April 2012


The European Commission’s competition regulators have sent out another questionnaire regarding Universal’s bid to buy the EMI record companies, according to Reuters.

The EC previously asked all affected parties for their opinions about the proposed takeover in March, and enough concerns were raised to persuade the regulator to proceed with a full three month investigation, rather than just approving the deal after one month, as it did with Sony’s bid to buy EMI Music Publishing.

A second questionnaire seeking commercial data from labels then followed, while this new call for information goes into more detail about the power (or not) of the big music companies, and delves further into those areas where most concerns were raised in phase one of the investigation. Most of the topics covered are predictable, though interestingly it seems the EC is particularly concerned about a combined Universal/EMI’s dominance in the jazz and classical genres as well as in chart hits.

Questions also look at whether Universal dominates radio and TV’s music output (it’s official tie up with the ‘Voice’ franchise has already caused some criticism in the UK tabloids), and whether or not, as the majors clam, the dominance of a small number of digital music providers – particularly Apple and Spotify in Europe – restricts the rights owners’ control over online pricing. It also poses other questions about the relationship between the majors and the digital players, including what control they have over the positioning of artists and music within digital stores.

The EC could block or approve Universal’s EMI deal outright, or look for a compromise that would force the mega-major to sell off some of its assets to win approval. Universal has so far resisted the temptation to offer such concessions (unlike Sony, which secured approval for its publishing purchase by committing to sell off some catalogues), but many reckon some remedies will be asked for by the regulators. And interest in the questionnaire about jazz and classics might suggest what kind of catalogues Universal would have to sell on to get the green light.

Pan-European indie labels group IMPALA and Universal’s rival Warner Music continue to oppose the takeover, of course. It was thought the EC would make a decision in early August, though Reuters is now pointing to early September.

Meanwhile, legendary producer George Martin has criticised the break up and sale of EMI to its two biggest rivals, Universal and Sony, saying it will give the two mega-majors a “virtual monopoly”.

Martin, who spent a chunk of his career working for EMI of course, is widely quoted as saying: “I am saddened that great companies have been swallowed up by the giants, and the domination of the recording and music publishing industry by Sony and Universal can only lead to a virtual monopoly in the European market. Is this what the people want? I always thought that democracy ensured a level playing field for our music industry, but I am wrong”.

Universal bounced back a quick response, saying that under Universal’s stewardship EMI will be able to enjoy a renaissance after a decade of uncertainty. According to the Telegraph, a spokesman for the company said: “Sir George has not spoken to anyone at Universal Music about this. If he did, we – as a long-standing music company which invests tens of millions in great British talent – would welcome the opportunity to explain how we will enhance that creative investment in EMI and its digital future. Universal Music is the right home for the company; we are music people. EMI will fare much better with us than with non-music owners, who only asset-strip the business”.

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