M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Wednesday, August 15, 2012

Senators weigh in on EMI acquisition

In a letter to the FTC, Senators Herb Kohl (D-WI) and Mike Lee (R-UT) come to the defense of audiophiles everywhere.   Their letter summarized findings of a hearing by the Subcommittee on Antitrust, Competition Policy, and Consumer Rights on the proposed acquisition of EMI by Universal.  They point to the rapid shift in the structure of the music distribution market from CDs to online distribution and caution that the acquisition could potentially be anticompetitive - a combined Universal/EMI controls over 40% of US market share by revenue (and 51 of the 2011 Billboard 100).  Sens. Kohl and Lee argue that the strength of a combined Universal/EMI's catalogue could form a bottle-neck in any online distribution and create market power for the combined entity, stifling potential competition and efficiency.  

For its part, Universal's CEO told the committee that it would be "insane not to license, develop, make available through as many platforms through as many retailers as possible."  I don't know...I seem to remember a time not long ago when all the major record labels were "insane" in precisely that way. 

In any event, here's the full text of the letter to the FTCThe ball is in the FTC's court.  

-bjmq

http://lawprofessors.typepad.com/mergers/2012/08/senators-weigh-in-on-emi-acquisition.html

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