Proposed Universal-EMI Merger Could Remix Antitrust And Copyright Law

The proposed Universal-EMI merger could lead to another remix of antitrust and copyright law as regulators grapple with consolidation in the recorded-music business.

Notably, the proposed acquisition could affect digital sampling, the technique musicians use to digitally copy and remix sounds from existing albums into a new sound recording.

As described in a previous Antitrust Today post, the FTC and the European Commission are reviewing the proposed merger and the antitrust subcommittee of the U.S. Senate Judiciary Committee will hold a hearing on the controversial acquisition.  The idiosyncrasies of the music industry, however, as well as the challenge of defining the relevant market, make the analysis of the proposed merger’s likely effects on competition difficult. 

This analysis is complicated by the fact that current copyright law, at least under the Sixth Circuit’s reasoning in Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005), eliminates certain defenses when a plaintiff claims the defendant’s digital sample infringed a copyright in the sound recording.  In support of this conclusion, the Sixth Circuit stated, “[t]he sound recording copyright holder cannot exact a license fee greater than what it would cost the person seeking the license to just duplicate the sample in the course of making the new recording.”  

A recent article by a Constantine Cannon attorney explores the antitrust overtones of the Sixth Circuit’s statement and examines how the proposed consolidation of record labels might affect the practice of digital sampling and the potential market of licensing sound recordings for sampling.