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US indies group calls for American remedies for Universal/EMI deal

By | Published on Tuesday 31 July 2012


Following Universal Music’s proposal last week of a wide-ranging set of remedies to placate competition regulators in Europe who are considering the mega-major’s bold bid to buy EMI, the trade body for the US independent sector, A2IM, has called for similar divestments to be ordered by regulators in America should they be thinking of green lighting the takeover deal, which they probably are.

In a statement, A2IM said: “With no divestitures or operating remedies proposed for the US – the world’s largest music market and home to the vast majority of the technology companies who work with the music community – the negative impact on music consumers and emerging technology companies [of this proposed deal] is clear”.

“Such market concentration will diminish healthy competition, providing one dominant market leader [with] damaging clout in terms of both consumer pricing and the means with which music is made available. Approval of such an acquisition with no US remedies will [also] further constrain [independent music] resources. We continue to join our European IMPALA independent music label colleagues in their concern over this acquisition and reiterate A2IM’s opposition to this transaction”.

As with IMPALA, A2IM’s official viewpoint is that the regulator – the Federal Trade Commission in the US – should block the Universal/EMI merger outright, though many in the independent community on both sides of the Atlantic expect the deal to be ultimately approved, but want to see the maximum possible remedies attached to any approval, forcing Universal to sell of large chunks of EMI. As previously reported, proposed remedies in Europe include selling much of EMI’s classical and jazz catalogue in the region, whole businesses in some territories, and the Parlophone and EMI/Chrysalis labels in the UK.

US competition regulators are traditionally less demanding than their European counterparts, though this deal has been put under a lot of scrutiny Stateside, and it remains to be seen whether any remedy negotiations will be required before Universal gets the all clear. As it currently stands, the mega-major still hopes to take full ownership of EMI’s all important Capitol division in the US.

Responding to A2IM’s latest statement, Universal noted the previously reported divide in the indie community, where some remain vehemently opposed to the Universal/EMI deal, but others have expressed no strong opinions one way or the other, while others still have spoken in favour of Universal taking ownership of the EMI record company (possibly with an eye to bidding for any EMI assets that regulators force to be sold).

The major said in a statement to Billboard: “[A2IM] clearly does not speak for the many indie labels and artists who have come out publicly in support of the deal. There is growing recognition that Universal Music’s investment in EMI will create more opportunities for new and established artists, expand music output and support new digital services. Barriers to entry have evaporated in today’s digital environment and there are more ways than ever for labels and artists to get their music out to fans. We are working with regulators around the world and are confident of winning approval”.