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LoginEMI Sale In Peril? AIM Calls For UK Gov't Review; Warner Music Hires Anti-Trust Law Firm
January 19, 2012
By Richard Smirke, London
AIM, the U.K.'s Trade Association for the Independent Music Industry, has called on the British government to stop the break-up and sale of EMI.
The association is asking its 800 member companies to send a pre-written letter to their local constituency Member of Parliament (MP) opposing the division and sale of the music major to Universal Music and Sony.
Calling the independent music sector the "true and acknowledged creative force in the music industry," the draft letter urges MPs to review and oppose the sale of EMI's recorded music operations to Universal Music and EMI Music Publishing to Sony on the grounds that it will increase market distortion.
"This move will undoubtedly concentrate the global music market still further into the hands of two dominant major companies - Universal and Sony," the letter states. "That itself is enough to demand that the U.K. Government looks closely at, and opposes the proposed sale of the only U.K. major music company to the remaining gigantic multinational, whose monopolistic position has already been a cause of market decline."
The letter goes on to say that, "if the deals with Universal and Sony are allowed to go ahead Warner Music will effectively be relegated in size to a position where it can offer no real global competition, and the global music market will be in the control of just two huge companies -- one French and one Japanese."
Referencing IMPALA's vocal opposition to Universal/Sony's acquisition of EMI, as well as past European Commission investigations into competition regulations relating to the music industry, the letter goes on to state: "The basic principles of competition in cultural markets do not tolerate making either Sony or Universal more powerful."
It also goes on to quote Martin Mills, chairman of the Beggars Group, which owns and distributes a number of high-performing independent labels, including XL, 4AD, Matador and Rough Trade. Mills describes Universal's acquisition of EMI's recorded-music operation as "breath-taking arrogance."
"It's hard to imagine this acquisition being approved, given Universal's existing dominance in an over-concentrated market. Even greater dominance would be bad news for almost everyone involved in the art and business of music," Mills goes on to say.
The letter concludes by urging U.K. MPs "to raise this issue in Parliament" and "that the likely effects of these proposed sales on competition, retail, consumer choice and the growth of monopolistic power in the music industry are fully examined… That outcome, we strongly believe, cannot include this break-up and sale of EMI as proposed."
Further opposition to the proposed EMI sale could also be coming from Warner Music itself, which according to American legal blog the Legal Times, reports that the label has hired U.S. law firm Brownstein Hyatt Farber Schreck to lobby against the merger. According to the Legal Times Blog, Warner Music, which itself unsuccessfully bid for EMI's recorded music division, is looking to contest the Universal/EMI deal on anti-trust grounds. The firm recently worked on behalf of the Dish Network in contesting the proposed AT&T - T-Mobile USA merger.
TAGS: Record Labels , Global , Legal & Management , Indies
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