Universal green light for EMI

Universal have gained unprecedented music industry power and prestige as The European Commission approve their £1.2bn takeover of EMI. The Commission stipulated strict conditions around the deal including the divestment of Parlophone and other divisions of EMI recordings on a global basis- This includes letting go of artists such as Coldplay, Kylie and Tinie Tempah alongside the back catalogue of everything from Blur to Bowie- but not The Beatles.

The commission concluded that the divestments, amounting to a reported 30% of EMI’s global revenue mean that the purchase no longer raises competition concerns. The implications of the deal have been debated throughout the industry over the last few months, with the independent sector divided on what it means for them. Regulators in other territories including New Zealand, Japan and Canada had already approved the takeover.

Commission Vice President in Charge of Competition Policy Joaquin Almunia said: "Competition in the music business is crucial to preserve choice, cultural diversity and innovation”

Almunia continued: “The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits."

Further divestments include other EMI labels such as Chrysalis (minus Robbie Williams), Mute Records and EMI’s 50% share in the ‘Now That’s What I Call Music’ series. Read a complete list of the divestments over at Music Week.

A statement from Universal said: “Universal Music Group is delighted to have received regulatory clearance from the European Commission for its acquisition of EMI Recorded Music. Today’s approval brings to an end an extensive EU regulatory review and the acquisition will benefit the artistic community and music industry”.

Crucially, the major has committed not to include ‘Most Favoured Nation’ clauses in its favour in any new or renegotiated contract with digital customers in the European Economic Area for the next ten years. This essentially means that if digital services throughout that area negotiate a licensing deal with Universal’s competitors, the same terms must be offered to Universal, with the purpose of keeping a level playing field.

The EC stated that the initial takeover deal would have given Universal excessive power in the digital market, and that its investigations focused on markets in which music companies license to digital services such as Spotify and iTunes.

The jury remained out on this particular point as far as Beggars Boss Martin Mills is concerned, who spoke out after the deal, referring to Universal saying: “Even with these divestments, their ability to dominate and control the market has reached even more unacceptable levels”.

Mills continued: "Anyone trying to start a new digital service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour."