Federal lawmakers are expressing concerns over Sunday's announcement that Vivendi Universal (VU) will buy MP3.com, saying that it's time for Congressional scrutiny of the rapid-integration takeover of
Federal lawmakers are expressing concerns over Sunday's announcement that Vivendi Universal (VU) will buy MP3.com, saying that it's time for Congressional scrutiny of the rapid-integration takeover of the e-music marketplace by the major labels, Billboard Bulletin reports. As reported yesterday, VU is to buy the online music company in a cash and stock deal valued at about $372 million.
"After trying to ignore the Napster phenomenon for two years, I am glad the recording industry is finally responding to consumer demands," says Congressman Chris Cannon, R-Utah, a member of the Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property. "However, I remain concerned about the dangers of monopolization in the music distribution marketplace. Vertical integration seems to be taking place before our very eyes. The announcement of the Vivendi-MP3 merger does little to alleviate those concerns."
"In fact," he continues, "the prospect of a 'copyright cartel' is an area I hope the Judiciary Committee will actively explore in the coming months. We have an obligation to ensure that competition remains vigorous, artists are paid in a fair and timely manner, and consumers have access to digital music."
Rep. Rick Boucher, D-Va., says Congress may need to "consider legislative safeguards" to ensure competition and that consumers' needs are best served. "For the time being, I'm going to be very interested to see if these two announced [major label/e-distribution] projects, Duet and MusicNet, agree to a complete cross-licensing of each other. I'm hoping it does happen," he says. "I'm also interested to see the response of both of these projects when the first unaffiliated distribution competitor asks for licensing of both of their inventories -- that's where the real test comes."
Subcommittee chairman Howard Coble, R-N.C., who held a hearing last week on E-music issues at which officials for VU and MP3.com testified, but didn't mention the buyout, says: "I was surprised to hear about it after folks from these two companies were looking me in the eye just the other day."