Universal’s rivals are sounded out over EMI

UNIVERSAL’S takeover of EMI could be affected by its rivals’ concerns after the European Commission (EC) wrote to other labels asking for their input on the music giant’s £1.2bn deal.

The EC is keen to gauge concerns over the drawn-out deal, with any competition issues potentially meaning the regulator will apply clauses to the takeover arrangement. An EC spokesman said yesterday that the measure was standard procedure on deals of this size, although any objections will be taken into account before the regulator makes its decision, scheduled for September.

The commission is keen to avoid the kind of lengthy appeals process that plagued Sony’s takeover of BMG until 2007, three years after the deal was originally waved through. Sony’s rivals were not given the opportunity to air their concerns before the takeover was approved and a team of labels claimed the deal would harm competition.

Universal Music Group has already proposed a number of concessions including selling off European rights to EMI artists including Pink Floyd and David Guetta, and the subsidiary Parlophone, excluding the Beatles catalogue.

A spokesman for the label said it remains confident of the deal being approved next month and that the takeover would benefit all parties in an industry that has struggled in the face of online piracy. One of the factors drawing out Universal’s purchase of EMI is the commission having to take account of the changing nature of the market.

The EC has earlier raised concerns that Universal’s purchase of EMI threatens to “reduce competition in the recorded music market”.

The world’s biggest record label has said it will spin off some labels to reduce the 40 per cent market share it would have in Europe if the deal goes through, a level considered anti-competitive by the EC.