European regulators to deliberate Universal-EMI deal Friday
The European Commission’s competition committee is scheduled Friday to deliberate whether it will approve Universal Music Group’s proposed $2.2-billion merger with EMI Music, according to industry officials.
If approved by antitrust regulators in Europe and the U.S., the deal would create the world’s largest record company, with a market share of nearly 40%.
Even so, traditional record labels don’t wield as much power as they once did in prior decades when they controlled the physical distribution of music to retail stores. The advent of the Internet ushered in an era of rampant piracy and opened up inexpensive ways for artists to distribute their music online without a traditional record company.
European regulators, aware of the diminished power of traditional record companies, this year approved a $1.9-billion acquisition of EMI’s publishing business by a consortium led by Sony Corp. The deal also cleared U.S. regulatory hurdles and closed in April.
Universal’s transaction has been more fraught, with European officials insisting that Universal shed major assets in order to dilute its market power. Among the requirements was that Universal’s share of the recorded music market not exceed 40% in any European country.
Should the committee arrive at a decision Friday, the ruling probably would not be made public for days or weeks afterward as committee staff members draft a full document with supporting legal arguments. European regulators have said they will issue a ruling by Sept. 27.
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