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AIR Speaks Out About Universal EMI Merger Approval By ACCC

by Paul Cashmere on September 19, 2012

in News,Noise Pro

The Australian Independent Record Labels Association has spoken out about the dangers of the Universal Music and EMI merger and ramifications to the music industry in Australia and globally.

EMI images photo noise11.com

EMI

The ACCC (Australian Competition and Consumer Commission) will not oppose Universal Music Holding’s purchase of EMI Music for Australia. AIR believes that after the merger, the Universal/EMI combination will have more than a 50% market share in Australia. “The merger is bad for the health of the Australian independent music sector and will result in decreased musical diversity and consumer choice,” AIR suggests.

In a statement to Noise11 this morning, Nick O’Byrne (AIR), Charles Caldas (Merlin) and David Vodicka (AIR) made comments.

Charles Caldas, CEO of Merlin, the global rights agency that represents the largest and most important set of independent labels rights, issued the following statement, “The ACCC’s decision is incomprehensible to me, and marks a terrible day for Australian music consumers. If this transaction goes through unchallenged, we can only see those consumers facing less choice, higher prices, and less comprehensive digital offerings than they should be entitled to enjoy. Merlin sent extensive submissions to the ACCC, raising serious concerns about the impact of this transaction on the digital market, just as we did to the European authorities. Given the fact that the EC, based on those same arguments, came up with an extensive statement of objections to the merger, I am astounded that the ACCC has seemingly blindly waved this through, ignoring the interests of consumers in favour of the most dominant player in the market”.

David Vodicka, Chairman of AIR and the independent label representative on boards of both the PPCA (Phonographic Performance Company of Australia) and ARIA (Australian recording Industry Association) had this to say, “This is a deeply disappointing decision for the independent music sector, which disregards the practical effects of combining two already substantial music companies into a company that will control over 50% of the domestic music market. The result will be dominance of both media outlets and consumer spaces by Universal Music, stifling the development of new businesses that don’t adhere to Universal’s requirements, and ultimately less choice for consumers”.

Nick O’Byrne, General Manager of AIR states, “Global remedies will not sufficiently address Universal’s market dominance through catalogue ownership, distribution and business practices specific to this territory. The ACCC needs to enforce territory specific concessions and divestments to ensure fair competition in Australia. What is even more galling is that the ACCC has not waited to see the outcome of merger reviews and potential divestments in Europe and the USA before making this announcement”.

AIR is concerned they “the merger will see Universal’s market power exert undue influence on fledgling digital business models as well as controlling access to market through media, digital retail and physical retail. It will also strengthen its control over a large proportion of worldwide digital distribution”.

“AIR is deeply concerned that Universal’s digital business practices will curtail innovation while increasing the company’s equity in selected existing digital service platforms”.

 

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