U.S. Indies Blast Universal EMI Divesture Plan

In Europe, there are some cracks in the independent label community's unified resistance to the Universal's proposed purchase of EMI and the divestiture package offered to EU regulators. But in the U.S., where few if any UMG assets will sold off, indie labels appear united in opposition. American Association of Independent Music (A2IM) President Rich Bengloff’ issued this strong statement yesterday on Universal’s proposed European Commission concession package related to its proposed acquisition of EMI:

"A2IM members read with interest Friday’s news reports about the submission of Universal’s proposed concession package, in regards to the proposed acquisition of EMI’s recorded music business, that was sent to the European Commission. If the news reports are correct, almost all of the proposed divestitures and behavioral remedies are focused entirely overseas – creating a major problem for U.S. consumers, artists, labels and the technology companies they work with.

As we have noted in prior statements, “the increased concentration of copyright ownership, historically, has always hurt the Independent label community in terms of achieving economic parity and market access.” With no divestitures or operating remedies proposed for the U.S. – the world’s largest music market and home to the vast majority of the technology companies who work with the music community – the negative impact on music consumers and emerging technology companies is clear. Such market concentration will diminish healthy competition, providing one dominant market leader damaging clout in terms of both consumer pricing and the means with which music is made available. The effect on both promotional access and monetization for independent music labels and artists is equally clear. Approval of such an acquisition with no U.S. remedies will further constrain our resources (with higher potential distribution fees and less money available to create diverse music for consumers both very probable). We continue to join our European Impala Independent music label colleagues in their concern over this acquisition and reiterate A2IM’s opposition to this transaction and, given Universal’s penchance to monopolize the marketplace, we call on the FTC to take the required steps to insure that this transaction is blocked so that it does not move forward."