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European Commission

Press release

Brussels, 21 September 2012

Mergers: Commission clears Universal's acquisition of EMI's recorded music business, subject to conditions

The European Commission has approved under the EU Merger Regulation the proposed acquisition of EMI's recorded music business by Universal Music Group. The approval is conditional upon the divestment of EMI's Parlophone label and numerous other music assets on a worldwide level. The Commission had concerns that the transaction, as initially notified, would have allowed Universal to significantly worsen the licensing terms it offers to digital platforms that sell music to consumers. To meet these concerns, Universal offered substantial commitments. In light of these commitments, the Commission concluded that the transaction would not raise competition concerns anymore.

"Competition in the music business is crucial to preserve choice, cultural diversity and innovation. In this investigation, we have paid close attention to digital innovation, which is changing the way that people listen to music. The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits." said Commission Vice-President in charge of competition policy Joaquín Almunia.

The proposed merger would bring together two of the four so-called global "major" record companies, leaving only three majors. The Commission had concerns that following the merger, Universal would enjoy excessive market power vis-à-vis its direct customers, who sell physical and digital recorded music at retail level. In particular, the Commission focussed its investigation on the markets where record companies license their music to digital retailers such as Apple and Spotify. The Commission found that the proposed transaction, as initially notified, would have increased Universal's size in a way that would likely have enabled it to impose higher prices and more onerous licensing terms on digital music providers. This could have negatively affected the possibilities for innovative providers to expand or launch new music offerings and would ultimately have reduced consumers' choice for digital music, as well as cultural diversity in the European Economic Area (EEA).


To remove the Commission's concerns, Universal committed to divest significant assets.

These divestments include EMI Recording Limited, which holds the iconic Parlophone label (home to artists such as Coldplay, David Guetta, Lilly Allen, Tinie Tempah, Blur, Gorillaz, Kylie Minogue, Pink Floyd, Cliff Richard, David Bowie, Tina Turner and Duran Duran). The divestments also encompass EMI France (which holds the David Guetta catalogue), EMI's classical music labels, Chrysalis (home to The Ramones and Jethro Tull), Mute (home to Depeche Mode, Moby and Nick Cave & The Bad Seeds), various other labels and a large number of local EMI entities. The divestment package also includes Coop, a label licensing business selling artists such as Mumford and Sons, Garbage and Two Door Cinema Club.

In addition, Universal committed to selling EMI's 50% stake in the popular Now! That's What I Call Music compilation JV and to continue licensing its repertoire for that compilation in the next ten years.

Universal finally committed not to include Most Favoured Nation (''MFN'') clauses in its favour in any new or renegotiated contract with digital customers in the EEA for ten years. MFN clauses oblige digital customers to extend any favourable term granted to Universal's competitors to Universal. This commitment will allow Universal's competitors to negotiate more freely with digital customers and further levels the playing field between these competitors and Universal.

The rights to be divested are worldwide and cover both digital and physical music. This will ensure a viable and competitive exploitation of the divested artists and catalogue by the purchaser of the assets.

In light of these commitments, the Commission concluded that competition on the digital music markets in the EEA will be adequately preserved and that the transaction will have no negative impact on consumers.


Universal notified its proposed acquisition of EMI's recorded music business to the Commission on 17 February 2012. The Commission opened an in-depth investigation on 23 March 2012 (see IP/12/311). A statement of objections, setting out the Commission's competition concerns, was adopted on 19 June.

The Commission focussed its investigation on the markets for digital music. Although sales of CDs and other physical music still account for the majority of sales in the European Economic Area (EEA), digital sales are increasing and are widely expected to overtake sales of physical music in the near future.

In digital music, streaming services such as Spotify and other new business models (e.g. telephony subscriptions with music) are growing, competing with iTunes and other download services. The Commission assessed the merger's impact on both the EEA-wide and national market levels.

The Commission, the US Federal Trade Commission (FTC) and other antitrust authorities investigated the effects of this significant merger in their respective jurisdictions. As the market position of Universal and its competitors differ in these different regions, the Commission focussed on the effects of the merger in the EEA.

Companies and Products

Universal is the world's leading music recording company. It is active both in discovering, developing and promoting recording artists and in the wholesale of recorded music. It also has activities in fields such as online music retail, music publishing, artist management, merchandising, event management, and event venue services. Universal is part of the Vivendi group. Vivendi is an international media company whose activities include telecommunications, the creation and distribution of content and TV channels, digital music retail and videogames.

EMI Recording is active in discovering, developing and promoting recording artists and in the wholesale of recorded music. After the Commission cleared the acquisition of EMI Music Publishing by a consortium led by Sony and Mubadala in April (see IP/12/387), EMI has limited activities in music publishing and related services.

Merger rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

There are currently four other phase II investigations. The first second phase investigation relates to the proposed acquisition of Inoxum, the stainless steel division of ThyssenKrupp of Germany, by the Finnish stainless steel company Outokumpu (see IP/12/495), with a deadline of 16 November 2012. The second on-going phase II investigation was opened in June 2012 into the proposed acquisition of Orange Austria by Hutchinson (see IP/12/726). The deadline for this investigation is 30 November 2012. The third one concerns the planned acquisition of TNT Express by UPS (see IP/12/816), with a deadline of 15 January 2013. Finally, the fourth phase II investigation relates to the proposed acquisition of Aer Lingus, an Irish-based airline, by Ryanair (see IP/12/921), with a deadline of 6 February 2013.

A non-confidential version of today's decision will be available at:

Please see also: MEMO/12/696

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

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