Senators Send Letter on Universal-EMI Deal

Adding to the challenges facing Universal Music Group's plan to acquire rival EMI Music, the two ranking members of the Senate's subcommittee for antitrust issues said in a letter to the Federal Trade Commission that the proposed deal "presents significant competition issues that merit careful FTC review."

The FTC is already reviewing the $1.9 billion deal to determine if it would harm U.S. consumers, and the subcommittee's letter carries no formal authority. But it was nonetheless noteworthy for several reasons. Indicating unusual consensus on the gravity of the deal's potential implications, the letter was sent by Democratic Chairman Herb Kohl (WI) and Mike Lee (UT), the ranking Republican, who have never previously co-signed such a letter analyzing a merger. The senators' letter identified the growing digital music market as the area where the deal's effects would need the most scrutiny. "The effect of the proposed acquisition on digital distribution of music, and particularly on the ability of new entrants to launch new services, is particularly critical to determining whether the acquisition will have any substantial anticompetitive effects."