In a 5-0 vote, the FTC approved Universal Music Group’s purchase of EMI—just hours after the European Union announced its own approval of the deal.  The following statement may be attributed to Berin Szoka , President of TechFreedom :

Big isn’t necessarily bad.  Combinations like this one can benefit consumers, especially when the merging firms are struggling to reinvent themselves in the face of technological change.  The FTC deserves credit for carefully analyzing this deal.  Most importantly, the FTC recognized that the merged firm will no more be able to stifle competition competition from online streaming services than either firm could on their own.  

It’s easy to bash the big labels as dinosaurs, but the truth is that they need new distribution channels to succeed as legal alternatives to piracy.  Indeed, this is a merger users of Spotify, Apple’s iTunes and the wide range of other digital services ought to love. UMG has done more than any other major label to support the growth of such services by licensing their content.

Even though all five Commissioners agreed this merger posed no threat to consumer welfare, Senator Herb Kohl isn’t happy that the FTC imposed no conditions on the deal.  This is hardly surprising, since he’s been repeating the same “Big is Bad” mantra for over twenty years. But the entire point of having an expert agency like the FTC is to ensure that mergers are assessed under antitrust law’s legal doctrines—which are grounded in the same law and economics scholarship that has so thoroughly discredited Kohl’s visceral loathing of mergers. Let’s hope whoever succeeds Kohl as Chairman of the Senate Antitrust Committee is more humble about his ability to out-smart either the FTC or the great ongoing churn of the digital revolution.  That, ultimately, is what protects consumers, not political grandstanding.

For more background on this merger, read “ UMG-EMI Deal Is No Threat To Innovation In Music Distribution ,” by Szoka and Geoffrey Manne , Executive Director of the International Center for Law and Economics .  For more background on regulatory humility, read the Declaration of Internet Freedom led by TechFreedom and ICLE, among other groups.

Szoka is available for comment at  media@techfreedom.org . Find/share this release on Facebook , Twitter or Google+ .

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