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In today's testimony before the Senate Antitrust Subcommittee, Public Knowledge President Gigi B. Sohn will oppose the Universal Music Group (UMG) and EMI Music merger, arguing that the deal will result in “less competition and choice in distribution, stifled innovation, and higher prices.”
Sohn notes that if a combined UMG-EMI withheld its music from a digital service, “You would not have 6 of the top 10 songs for 2011. You wouldn’t even have a majority of the top 100 songs for 2011 because a combined UMG and EMI would own 51 of them. The fact is, you just would not have a viable digital music service and as a result, you will be beholden to the merged entity."
Increased consolidation has already had a negative impact on digital music services. Sohn points out, “The company Deezer, a music streaming service similar to Spotify, has entered markets in 81 countries around the world, but not in the U.S.” When asked, Deezer says entering the U.S. market is too expensive.
“EMI Music has been a leader in innovation. They were the first label to sell a digital download. They were the first to remove DRM from their MP3s on iTunes, and they are the only label that works with application developers and artists through their Open EMI project” Sohn adds. “If this merger is allowed, consumers and artists will be the losers.”
The written and oral testimony is here.
The 1:30pm hearing is streaming here.
An in-depth antitrust analysis of the merger, by Public Knowledge and the Consumer Federation of America, is available here.