Reuters: Private Equity: EU quizzes on Universal, EMI combined market power

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EU quizzes on Universal, EMI combined market power Apr 24th 2012, 17:11 By Foo Yun Chee BRUSSELS, April 24 | Tue Apr 24, 2012 1:11pm EDT BRUSSELS, April 24 (Reuters) - EU antitrust regulators are investigating whether the combined power of Vivendi's Universal Music Group and British record label EMI's recorded music unit will disadvantage rivals and users, according to people familiar with the issue. Questionnaires sent by the European Commission to competitors and users of Universal and EMI also showed the EU watchdog focusing on the companies' market share in classics and jazz music, compilations and the extent to which Universal dominates hit charts, they said. The people said the EU watchdog also wants to know whether online music services such as Apple and Spotify can constrain the pricing power of the combined companies. The Commission is also investigating whether Universal dominates radio or TV programmes, which could give it an important tool to promote its artists and also provide vital revenue streams, they said. The Commission is examining Universal's proposed $1.9 billion acquisition of EMI's recorded music and will decide by Sept. 6 whether to clear the deal, which would create a player almost twice the size of its nearest rival in Europe. Feedback from the questionaire will determine whether Universal will need to divest assets to address competition concerns. Third parties will have to reply to the list of more than 60 questions in the coming days, the people said. Universal and EMI hold a combined market share just below 40 percent of digital music distributed by iTunes and Spotify in Europe, making it the biggest single label. Impala, a lobbying group for independent music companies, has urged EU regulators to block the deal while rival Warner, which had also sought to buy EMI's recorded music, has warned of the risks of an overly concentrated market. EMI seller Citigroup Inc acquired the record label after its previous owner, Guy Hands' buyout firm Terra Firma, defaulted on loans owed to the investment bank. Last week, the Commission cleared a Sony-led consortium bid to buy EMI's music publishing business for $2.2 billion after the group agreed to sell the worldwide publishing rights of artists including Amy Winehouse and Rihanna. Link this Share this Digg this Email Reprints

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