The Commerce Commission has published a statement of preliminary issues relating to an application received from Universal Music New Zealand Limited (Universal) seeking clearance to acquire up to 100% of the shares in the recorded music business of EMI Music New Zealand Limited (EMI).

The statement of preliminary issues outlines the key competition issues the Commission currently considers will be important in deciding whether or not to grant clearance. The Commission's statement and the public version of the application are on the Commission's website at: www.comcom.govt.nz/clearances-register

The Commission invites submissions from parties who consider that they have information relevant to the Commission's consideration of this matter. Submissions can be sent to registrar@comcom.govt.nz with the reference Universal / EMI in the subject line of the email or to PO Box 2351, Wellington 6140 by Friday 13 April 2012.

Background

The recorded music sector is the part of the music industry that makes a record and provides it to consumers. This can involve a number of different steps including the discovery, signing and development of artists; the manufacture and distribution of the physical recording; the wholesale supply of the recording (either in physical or digital form) to retailers; and the retail sale of the recording. Both Universal and EMI are worldwide music recording and publishing companies involved in the promotion, development, and distribution of local and international artists.

 

Assessing an application for a merger or acquisition

When considering a proposed merger, the Commission must decide whether the competition that is lost in a market when two businesses merge is substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. A fact sheet explaining how the Commission assesses a merger application is available for download at www.comcom.govt.nz/mergers-and-acquisitions-merger-assessment-fact-sheet