European Commission releases statement of objections to Universal EMI bid

The European Commission has released a statement of objections to Universal Music’s £1.2bn bid for EMI’s record labels.

According to sources who have seen the list, it argues that music giant Universal already extracts materially higher prices from digital distributors than rivals, and that buying EMI would allow it to raise digital music prices.

The Commission reportedly disagreed with Universal’s assessment of its market share, which excludes music it distributes for independent record labels as well as arguments over the countervailing power of Apple and the pressure on legitimate music sales from piracy.

Among the Commission arguments Universal will have to address is a claim that its potential dominance of recorded music would be compounded by its existing position as number two in the music publishing market.

The objections put pressure on the Vivendi subsidiary of Universal to offer large concessions to save the deal from being blocked.

Universal said: “We are preparing a detailed response to the Commission’s statement which will address the concerns outlined in this procedural document,

“We will continue to work closely with the Commission and look forward to securing regulatory clearance.”

The company is expected to respond within days, setting the stage for a negotiation in which it may have to offer concessions about its future behaviour in the digital market as well as any disposals regulators demand.

Source: Music Week