Maybe if I understood the concept of anti-trust law better I could explain why both the Federal Trade Commission and the European Union are allowing the two largest music companies, Sony and BMG, to merge. It’s especially strange since in 2000 the EU stopped the merger of numbers four and five (EMI and Warner) and did the same in 2001 for numbers two and four (BMG and EMI).
As you might expect, the company’s say the merger is essential to their survival.
The two companies said they needed to merge to fight the ongoing industry depression, in which music sales have dropped by nearly one-third in the past three years. The industry blames Internet and bootleg piracy for the plummet, while other groups fault the labels themselves, saying they price CDs too high and fail to develop appealing new acts.
The severly myopic government regulators, on the other hand, believe that fewer companies won’t lead to less competition or higher prices.
But neither the E.U. nor the FTC found evidence that a merger would drive up consumer prices or freeze out competition, though the new company’s sheer size and past allegations that several major labels engaged in price-fixing did raise concerns.
No, I don’t know much about anti-trust law. But simple observation of the consolidation in the radio, television, and movie businesses over the past few years, should make it clear that mergers in the music industry will make their products even more homogenized, bland and expensive.