AOL, Time Warner, EMI to put case to EU next week
BRUSSELS, Sept 1 (Reuters) - America Online AOL and Time Warner TWX will next week try to persuade European regulators to clear their merger, while EMI Group aims to do the same for its joint venture with Warner's music unit.
During a two-day hearing behind closed doors on Wednesday and Thursday, the companies will tell the European Commission's competition department that concerns the deals could lead to collective dominance of the music industry are unfounded.
They will argue there is no danger the two deals will give the companies dominance over the provision of music, sport and entertainment over the Internet, an EMI spokesman said on Friday.
"The Commission is focusing to an inappropriate extent on the question of collective dominance, which we don't think is appropriate in the context of the music industry," he said.
Last month, the Commission -- the competition watchdog for the 15-nation EU -- sent the companies so-called "statements of objections", setting out its concerns.
It has until October 18 to rule on the Warner Music/EMI joint venture and six days longer to give its verdict on AOL/Time Warner. Both decisions are expected to be announced, however, on October 4.
The Commission said in June it was opening four-month in-depth probes into both deals, part of a wave of mergers and joint ventures which are reshaping the global media landscape.
OLIGOPOLY
It said it feared the EMI/Warner Music deal would lead to an oligopoly of four firms dominating the West European recorded music market. It said its detailed investigation was also likely to focus on music publishing and the digital delivery of music via the Internet.
Announcing the AOL/Time Warner in-depth probe, the Commission said it would "examine the effects of the transaction on the emerging business of music distribution over the Internet and on the markets for Internet dial-up access and paid-for content."
The companies will tell the hearing, a normal step in the EU's merger review process at which all interested parties may speak, that the Commission's fears are based on an incorrect understanding of the way the music industry works.
"In this industry, it's impossible to collude in the way that's being suggested," the EMI spoeksman said. "Also, it's not unlike other industries where there's four or five major players. That's not by definition anti-competitive."
EMI also disputes the Commission's assertion that the deal would concentrate much of the world's music publishing rights in few hands, saying regulators have failed to appreciate the power of collecting societies in that market.
The companies will also say they are prepared to counter any fears they could dominate the online provision of entertainment by promising to give non-discrimatory access to their network to other content providers.
"We have undertaken not to discriminate in favour of AOL. There will be no exclusive tie-up," the spokesman said. "It's in our interests to use as many outlets as possible to ensure the widest possible dissemination of our music."
After next week's hearing, the companies and Commission must discuss possible solutions to competition problems. The companies must make any offers by mid-September.
Separately, the Commission announced on Friday it had restarted its review of the rival merger of Vivendi , Canal Plus and Seagram CA:VO . |
