Tuesday 18 September 2012, 11:49 | By

IMPALA calls on European Commission one more time to block Universal/EMI

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IMPALA

Pan-European indie label trade body IMPALA has sent one last letter to the European Commission as competition regulators there enter the final phase of their investigation into Universal Music’s bid to buy the EMI record company.

As previously reported, having debated Universal’s most recent proposals regards its EMI bid with representatives from each of the European Union’s member states, this week the EC’s competition chiefs will share their findings with other European Commissioners. From that meeting a final ruling should be made.

It is thought that, with Universal now offering to sell off between a quarter and a third of EMI’s assets, including some catalogues on a global basis, and much of the one-time British major’s UK operations, the EC will give the deal a green light. Approval from the US regulator is also expected later this month.

But IMPALA, which has opposed the deal throughout, continues to say that the EC should block the takeover outright. In a letter to the European Commissioners, the indie labels body asks the EC to “stay faithful to its Statement Of Objections issued in June, which concluded that the merger was a real danger in nearly all member states”.

The letter adds that “allowing the biggest music company in the world to become even more powerful is inconsistent with the EC’s stated concerns about the digital market and how copyright is misused, [and] its ambitions for unlocking the potential of cultural and creative industries through their smaller actors”.

IMPALA Executive Chair Helen Smith concludes: “Blocking Universal’s attempt to increase its market power by buying one of its most thriving competitors is the logical outcome [of this investigation]. It is difficult to see how remedies could be compatible with the EC’s Statement Of Objections, which predicted that the merger would cause foreclosure of competitors’ access to media, as well as price increases and other problems. If Europe wants to promote competition and diversity, and ensure customers and consumers are protected from copyright abuse, now is the time to take a stance”.

Of course the independent label community IMPALA represents is itself divided over the Universal/EMI deal, with some influential indie label chiefs expressing support for, or at least no concern over, the expansion of the mega-major through an EMI acquisition, particularly given the divestments Universal has committed to make.

Indeed those planned divestments have made the proposed EMI deal positively attractive to some entrepreneurs in the indie sector who would like to bid for the EMI catalogues likely to go on the block. That included IMPALA’s own co-President Patrick Zelnik, one of the first indie label chiefs to speak resolutely in support of Universal, mainly because of his interest in bidding for the Virgin Records business, possibly in partnership with Richard Branson.

Though ironically, it looks likely that the Virgin catalogue will be the one bit of EMI not up for sale in Europe. And anyway, there’s a very high chance major-label-in-the-making BMG may swoop and buy pretty much all of the EMI crumbs that are on the table (which will actually be several loaves).

Nevertheless, IMPALA itself remains the most staunch opponent to the EMI deal, despite the pretty radical divestments that are now believed to be in the proposals.

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