Two Consumer Groups Want UMG/EMI Deal Examined By Senate Subcommittee
April 27, 2012 at 3:49 AM (PT)
THE NEW YORK TIMES reports "opponents of the UNIVERSAL MUSIC GROUP's $1.9 billion bid for EMI's record labels are asking the Senate Judiciary subcommittee on antitrust issues to examine the deal, raising the possibility of Senate hearings."
The digital rights organization, PUBLIC KNOWLEDGE and THE CONSUMER FEDERATION OF AMERICA sent a letter to subcommittee members Senators HERB KOHL and MICHAEL S. LEE detailing their objections to the deal. "The letter argues -- as PUBLIC KNOWLEDGE and others have contended in earlier complaints -- that UNIVERSAL's expanded market share would stifle competition in digital music," notes THE TIMES. "But it also takes the novel tack of comparing the situation to the Justice Department's recent lawsuit charging APPLE and five major publishers with collusion in setting the price of e-books."
"If five companies with a market share of less than 50% pose a threat to nascent competition from digital distribution models," the letter says, referring to the e-books case, "does one company with a market share above 40% pose a similar threat?"
UNIVERSAL released this statement, writing "C.F.A.'s effort to compare this case to the government's e-books case completely misunderstands the law. The e-books case is about an alleged illegal price-fixing conspiracy. Market shares don't matter in a case like that -- it's just as illegal for two tiny local bookstores to fix prices as it is for giant publishing companies. The law governing mergers is totally different, and most mergers, like this one, are ultimately found to be beneficial to competition and consumers."