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Public Knowledge and Media Access Project Ask FTC Investigation of Music Deal

March 7, 2012 , , ,

Universal Music Group’s takeover of
competitor EMI, along with the sale of EMI’s music publishing business to Sony,
have the potential to thwart innovation in digital music, drive up prices and
minimize choices for consumers, Public Knowledge and Media Access Project told
the Federal Trade Commission (FTC) today.

In a letter to the agency, the two groups
noted that the purchase would reduce the number of major record labels from
four to three, giving the combined UMG/EMI company about 40 percent of
sales.  Similarly, the sale of the
music publishing business would “give it a significant blocking
position” by allowing it to control 32 percent of publishing revenues
worldwide.  A combined company
would hold publishing rights to 64 of the Billboard Hot 100 titles from 2011,
the groups said.

The
letter noted:  “In essence, the two majors’ whims
would control the emergence of new distribution options for the entire
industry. Digital services that do not require performance rights or
non-statutory mechanical rights in music publishing would still come up against
Universal, as the dominant player in recorded music, while services requiring
performance rights licenses or non-statutory mechanical rights licenses would
need to deal with both Universal and Sony, on each company’s own terms, in order
to launch a viable service.”

The
letter is here.