Updated: Layoffs, New Appointments at Universal-EMI Canada
Updated: Layoffs, New Appointments at Universal-EMI Canada

Australia's competition and consumer commission t he ACCC has given the thumbs-up to Universal Music's planned purchase of EMI Music.

With its green-light in this region, Universal Music's tie-up with EMI strides one step closer to a reality.
Already, the union has enjoyed regulatory clearance in Japan, Canada and New Zealand.

Universal said in a statement that, "Our investment in EMI will create more opportunities for new and established artists, expand music output and consumer choice, and support new digital services. We welcome the Commission's decision and are working closely with regulators in Europe and in the US to obtain further clearances."

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The ACCC mulled over its review of the deal within the Australian context over a 134-day period. On Monday, the regulator quietly made public its decision that it wouldn't oppose the proposed acquisition.

In its report, the ACCC said barriers to entry did not appear high for new, small-scale independent record companies, that Sony and Warner would remain strong competitors, that artists faced low barriers in switching labels, and that EMI was "not a uniquely vigorous or maverick competitor."

Australian Independent Record Labels Association (AIR), however, is far from impressed and blasted the ACCC, warning that the merger was "bad for the health of the Australian independent music sector" and would result in decreased musical diversity and consumer choice.

In a strongly-worded statement issued today, the Melbourne-based indies' trade body said the merger would 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." According to AIR, the merged company would have a combined recorded music market share in Australia of more than 50%.

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"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," the statement reads.

AIR chairman David Vodicka said the situation was "deeply disappointing." The ACCC had chosen to make its decision without further consultation with key parties opposing the merger, Vodicka notes, and there had been no talk of local divestments or remedies, a "worrying oversight" in the indies' eyes.

Charles Caldas, CEO of the London-based indies' digital agency Merlin, decries the ACCC's decision as "incomprehensible," and says it "marks a terrible day for Australian music consumers." If this transaction goes through unchallenged, says Caldas, "we can only see those consumers facing less choice, higher prices, and less comprehensive digital offerings than they should be entitled to enjoy."

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In a recent interview with Billboard.biz, Caldas was asked the realistic outcome of this merger. "We maintain the position that the best thing for the market overall," he commented, "is that this be blocked outright. We're realistic enough to know that we're not going to see this blocked outright. We would hope the conditions imposed are strong enough and broad-reaching enough to address the concerns about the digital music market."

And what sort of conditions might work? "It would have to be a very, very heavy set of divestments."

Of the Australian situation, AIR's GM Nick O'Byrne tells Billboard.biz, "There are mechanisms for challenging the ruling available to us. We have to see what decision the EC and U.S. arrive at before we can make a decision regarding our own challenge."

Regulators in the United States and Europe have yet to announce their rulings on a Universal-EMI merger, but decisions are expected this month.

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