The Role of Antitrust in Protecting Competition, Innovation, and Consumers as the Digital Revolution Matures: The Case against the Universal-EMI Merger and E-Book Price Fixing – Mark Cooper, Director of Research, Consumer Federation of America Fellow, Donald McGannon Communications Research Center, Fordham University – Jodie Griffin, Staff Attorney, Public Knowledge, June 2012
“This paper presents a detailed analysis of the proposed merger between Universal Music Group (UMG) and EMI by applying the standards and methods outlined in the recently revised Department of Justice/Federal Trade Commission Merger Guidelines. It shows that the UMG‐EMI merger is an unfair method of competition that constitutes an unreasonable restraint of trade because it will substantially lessen competition and is likely to enhance market power. Simply put, the postmerger firm will have a strong incentive and increased ability to exercise market power, particularly in undermining, delaying, or distorting new digital distribution business models, in a market that has been a tight oligopoly for over a decade. The merger creates a highly concentrated market by eliminating one of only four major record labels and results in an increase in concentration that is five times the level that the DOJ/FTC identify as a cause of concern. The recent history of anticompetitive, anti‐consumer conduct by this tight oligopoly and the role of EMI as a maverick in the digital era compound the anticompetitive effects of the merger and significantly increase the likelihood that the merger will not only result in higher prices but also undermine incipient competition.”
Sorry, comments are closed for this post.