House Subcommittee Asks 'Pointed Questions' About UMG-EMI Deal

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A House Of Representatives Subcommittee is adding additional pressure on UNIVERSAL MUSIC GROUP over their proposed $1.9 billion takeover of EMI MUSIC. THE NEW YORK TIMES reports, "on TUESDAY, the top REPUBLICAN and DEMOCRAT on the House Judiciary Subcommittee on Intellectual Property, Competition and the Internet sent a letter to executives at UNIVERSAL and two other major labels, asking pointed questions about how the merger would affect competition in the music industry."

The letter probes the control UMG would have if the merger is approved. Currently, UNIVERSAL has about a 30% share of recorded music sales, making it the world's largest record company. With EMI included, it would grow to somewhere between 40 and 50%.

"The House letter, signed by ROBERT W. GOODLATTE, a REPUBLICAN from VIRGINIA who is chairman of the subcommittee, and MELVIN L. WATT, a DEMOCRAT from NORTH CAROLINA who is the ranking minority member," notes THE TIMES, "takes a tack similar to one taken at a Senate subcommittee hearing in JUNE, asking whether the music industry 'has unique characteristics that may increase or reduce concerns' about the merger; how competition and innovation in digital music would be affected by the deal; and whether piracy and 'powerful buyers, like APPLE' would constrain UNIVERSAL's added power."

UMG released a statement, writing "We welcome the opportunity to answer any questions that the subcommittee may have. The global music market has been in decline for over a decade and it needs well-invested music companies to continue to create and nurture artistic talent alongside a strong and growing independent sector if it is to thrive."

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