EMI-Universal deal cleared by European Commission
EMI was owned by US bank Citigroup, after it was seized from Terra Firma
The European Commission has approved the takeover of UK music firm EMI by Universal Music, but it must sell some of the firm's most valuable labels.
The assets to be sold off include the Parlophone label, which is home to groups such as Coldplay and Blur.
The proposed £1.2bn ($1.9bn) takeover of EMI was announced in November, prompting a competition investigation.
Although the commission said its ruling would allay competition fears, rivals music labels have condemned the move.
EMI, with a history dating back to 1897, is home to artists including the Beatles and Pink Floyd.
Universal is a unit of French media giant Vivendi.
The Commission's demand for assets sales also includes disposal of EMI's Chrysalis, Mute, and Classics labels, as well as Universal's Sanctuary and Co-op Music labels.
"The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits," EU competition commissioner Joaquin Almunia said in a statement.
Citigroup is selling EMI, having bought it when buyout firm Terra Firma defaulted on loans owed to the US investment bank.
'Universal's arrogance'
Smaller rival music labels reacted angrily to the commission's decision. Impala, which represents independent label across Europe, claimed that the commission's conclusions acknowledged that "Universal's power is a problem across the whole market".
Helen Smith, executive chair of Impala, said: "This decision has finally put a freeze on Universal's ability to expand further and sets a benchmark for constraining abusive behaviour across the whole market.
"Following the approval of the Sony/EMI merger, however, this decision nonetheless reinforces what is already a powerful duopoly. Contrary to the basic principles of competition in cultural markets, artists and consumers will ultimately pay the price."
Martin Mills, chairman of Beggars Group, said: "It's good to see that the Commission has seen this deal as such a threat to the market that it has demanded and received truly swingeing commitments to divestments.
"However, that should not conceal that fact that Universal's arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels.
"Anyone trying to start a new digital service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour."
The takeover still needs approval from the US Federal Trade Commission.
No comments:
Post a Comment