An EU spokesperson, speaking under conditions of anonymity, told the business press the EC was readying ‘a so-called statement of objections listing possible problems with the deal’.
Earlier, the European Union’s competition chief Joaquin Almunia has warned that Universal won’t be allowed to use its proposed $1.9 billion purchase of EMI Group’s recorded-music business against digital music customers and artists.
As part of the American Senate antitrust subcommittee discussion on the bid, speaking in St Galeen, Switzerland, Almunia said he’s “getting ready to move to the next stage” which could mean that the European Commission formally sets out objections to the combination, under EU merger review rules.
Almunia said regulators must ensure that the combined company “would not be in a position to shape the future landscape in the digital music market to the detriment of users and artists”.
Citigroup Inc. (C) agreed in November to sell EMI Group’s recorded-music and publishing businesses in separate transactions for a combined $4.1 billion. Universal will buy EMI’s record labels for 1.2 billion pounds ($1.85 billion). A Sony Corp.-led group will pay $2.2 billion for the publishing unit, according to statements in November.
The sale, which will give Universal about 40 percent of the recorded music market if approved, is a concern for industry rivals who fear the new joined unit would have too much power to raise prices.
“A company with a large and popular catalog uecan have significant market power over digital platforms, which would have a keen interest to strike a deal with it. Competition authorities have the responsibility to monitor these market developments and allow all participants to play their part.”
The European Commission has until September 6 to rule on the deal.