Opposition To UMG Purchase Of EMI Gets Louder, Universal Says They 'Misunderstand The Law'
June 15, 2012 at 3:56 AM (PT)
Opposition continues to grow against UNIVERSAL MUSIC GROUP's proposed $1.9 billion purchase of EMI MUSIC, with two consumer-advocate organizations again voicing their opposition -- and one starting an online petition against the deal.
THE CONSUMER FEDERATION OF AMERICA and PUBLIC KNOWLEDGE "had already made their position known through letters to the leaders of the subcommittee and to the FEDERAL TRADE COMMISSION, which is reviewing the deal in the U.S.," reports THE NEW YORK TIMES. "But the report represents their most detailed argument against the deal, saying that an enlarged UNIVERSAL 'will have a strong incentive and increased ability to exercise market power, particularly in undermining, delaying or distorting new digital distribution business models, in a market that has been a tight oligopoly for over a decade.' The report also argues that the merger could lead to the kind of price fixing and collusion that the Justice Dept. has accused APPLE and five book publishers of in the e-book market. When the groups first made that comparison a month ago, UNIVERSAL said it 'completely misunderstands the law'."
"This is the same song sung to a different melody," UMG said in a statement. "There's nothing new here as C.F.A.'s analysis continues to vastly overstate market concentration. Indie labels are a vibrant and growing force accounting for nearly 30% of the market. The music industry is intensely competitive and barriers to entry have evaporated in today's digital environment."
The Senate Antitrust Panel has a meeting scheduled for next THURSDAY, JUNE 21st, which will feature UNIVERSAL Chairman LUCIAN GRAINGE and EMI GROUP CEO ROGER FAXON to testify for the merger. LIVE NATION Chairman IRVING AZOFF is also scheduled to support the deal.
Three opponents of the deal are set to appear. WARNER Dir. EDGAR BRONFMAN, JR, BEGGARS GROUP Chairman MARTIN MILLS and PUBLIC KNOWLEDGE Pres. GIGI SOHN.