Experts Call Approval Of UMG-EMI Deal A 'Toss Up'
May 17, 2012 at 3:50 AM (PT)
Will the purchase of EMI MUSIC by UNIVERSAL MUSIC GROUP be okayed by U.S. regulators? It's a 50/50 proposition, says a REUTERS survey of anti-trust experts. "Eight antitrust experts interviewed about the issue were divided about the chances for approval, largely because the music landscape has changed so much in recent years that it is not clear that a deal that would concentrate 40% of the recorded music industry in one company would harm competition," reports HYPEBOT.
"Ten years ago, the labels had power. Today they don't have any power. If they (the U.S. Federal Trade Commission) block it, it's just because they don't understand the market," UNIVERSITY OF FLORIDA Professor Of Antitrust Law DANIEL SOKOL said.
Two antitrust experts who spoke off the record told REUTERS that UMG faces a tough fight, especially because WARNER MUSIC GROUP is actively opposing the deal. "My sense is that the FTC could take a hard line depending on how good a job WARNER does in generating complaints," one said. "It wouldn't surprise me if it didn't go through."
Two Top Labels Would Control Close To 3/4 Of Business
The share of business that a combined UMG/EMI would have is still the bone of contention for critics. DIGITAL MUSIC NEWS writes, "If the deal closed right now with all approvals, UMG+EMI would account for more than 40% of total recording sales (physical, digital, whatever). Moreover, the top two labels (the new UMG plus SONY) would command roughly 73% market share."