(Clarification: This story has been updated to more accurately reflect the timing of Citigroup's donations)
At least half of the members of the Senate Subcommittee on Antitrust, which Thursday will hold a hearing on Universal Music Group’s proposed merger with EMI music, have received contributions from the two music giants or from rival firm, Warner Music.
In the months leading up to and following last November's announcement of proposed merger — which must win approval from both the U.S. government and the European Union — the record companies and their corporate ownwers have made a stream of contributions to members of the antitrust subcommittee and their individual PACs. Among the top recipients is the panel's second-ranking Democrat, Sen. Chuck Schumer, of New York. (Subcommittee chairman Herb Kohl, D-Wis., is retiring at the end of this year.) During 2011, the political action committee of EMI's owner, Citigroup, gave $10,000 to Schumer's PAC, Impact. Since 2009, 20 Citigroup employees have given $48,000 to Schumer's campaign. Citigroup, which is now trying to sell EMI, acquired the record label in February, 2011. Warner Music, meanwhile, has given Schumer, a contribution of $30,100.
Sen. Amy Klobuchar, a Minnesota Democrat who is up for reelection this year, has received $7,779 from Vivendi and $1,500 from Universal. Sen. Richard Blumenthal, D-Conn., got a total of $6,000 this year from Vivendi and Universal. Universal Music PAC, which contributed $1,000 to the Hawkeye PAC of Sen. Chuck Grassley, R-Iowa.
Over the course of his career, Schumer has received more than $440,000 from Citigroup — which owns EMI music and is Schumer’s second-largest donor — and $36,000 from Universal and its corporate parent, Vivendi. Grassley, Klobuchar and Sen. John Cornyn, R-Texas, have also received contributions of more than $30,000 each from Citigroup, Universal and Vivendi.
Warner Music Group, which joined the non-profit public interest groups Public Knowledge and the Consumer Federation of America in opposition to the merger, has also made contributions to many of the committee members; however the donations have been considerably smaller than those from Universal and EMI music.
While awaiting a decision from the Federal Communications Commission and the European Commission about whether the merger can go ahead, Universal filed two lobbying reports on antitrust issues, documenting a total of $1,000,000 spent on lobbying efforts.
On Tuesday, the European Union — which, along with the U.S. government, must rule on whether the merger can go ahead — filed preliminary objections to the consolidation of the world's two largest record companies, which would give Universal a 40 percent share of the global music market.
In the U.S., Public Knowledge and the Consumer Federation of America have contended that the pending merger poses a threat to consumers and the music industry as a whole. "The post-merger market share of EMI-Universal is sufficient to give it the power to distort or even determine the fate of digital distribution models," Public Knowledge wrote in a letter to the Antitrust Committee. In a release published in June, Public Knowledge argued that the merger would decrease competition in the music market and put UMG in a position to slow the development of the music industry, stifle the creativity of unsigned artists, and exploit consumers.
"Giving a firm with a strong interest in retarding digital distribution substantially more ability to do so is a mistake that can be avoided by denying the merger outright, or crafting conditions that prevent the abuse of this newly acquired market power," the group stated.
Donations from the music companies to the Senate subcommittee on Antitrust
|Chuck Schumer (D-N.Y.)||$476,416||$66,700|
|Amy Klobuchar (D-Minn.)||$39,504||$3,250|
|Chuck Grassley (R-Iowa)||$35,063||$3,000|
|John Cornyn (R-Texas)||$33,700||$1,000|
|Al Franken (D-Minn.)||$10,250||$3,300|
|Richard Blumenthal (D-Conn.)||$8,750||$0|
|Not receiving contributions: Herb Kohl (D-Wis), Mike Lee (R-Utah).|