Reuters: Financial Services and Real Estate: Senate panel to consider Universal deal to buy EMI catalog

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Senate panel to consider Universal deal to buy EMI catalog Jun 8th 2012, 21:36 Fri Jun 8, 2012 5:36pm EDT * Subcommittee sets hearing for June 21 * Europe preparing objection to deal WASHINGTON, June 8 (Reuters) - The U.S. Senate's antitrust panel will hold a hearing later this month to consider Universal Music Group's bid to buy a big chunk of EMI amid concerns the deal will lead to higher prices for both CDs and digital music. U.S.-based Universal, owned by Paris-based Vivendi, made the $1.9 billion deal to buy EMI's recorded music unit from Citigroup in November. The hearing by the Senate Judiciary Committee's antitrust subcommittee has been set for June 21, a spokeswoman said in an statement. The subcommittee did not issue a witness list. Combining Universal Music Group, which has a star lineup of Lady Gaga and Rihanna, with EMI's recorded music unit, whose catalog includes Katy Perry, the Beatles and Pink Floyd, would give the already powerful company a 40 percent market share. In Europe, where the deal also faces an antitrust review, the European Commission is preparing a formal "statement of objections," according to a person familiar with the matter. Universal has said it would work with the Commission to get the deal approved, most likely by selling some assets. The Commission has set a deadline of Sept. 6 to decide on whether to approve the acquisition. Sending a statement of objections would extend that deadline by about four months. The European Commission gave its approval in April to a consortium led by Sony to buy EMI's separate music publishing business. UMG spokesman Peter Lofrumento said Universal's EMI deal would allow the company to increase investment in digital services. "Universal Music is the right home for EMI; first and foremost, we're music people. We remain confident of regulatory approval," he said in an emailed statement. In the United States, the Federal Trade Commission, which is reviewing the deal to ensure it does not break antitrust law, is making inquiries about the pricing power of retailers like Apple and Amazon, who use cheap music to attract customers for more expensive goods. It is also asking about allegations made by consumer groups and others that Universal has been reluctant to license its enormous catalog of must-have music to digital startups, or has licensed the music only on onerous terms. Their inquiries also focus on illegal music downloads. Across U.S. music labels, revenues have plummeted 50 percent from 2000 to $7 billion in 2011, according to the Recording Industry Association of America trade group, which blames piracy for much of the losses. Link this Share this Digg this Email Reprints

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