June 21, 2012

How The Revolving Door May Help Kill Competition In The Music Industry

How The Revolving Door May Help Kill Competition In The Music Industry

Last year, the more than century-old music company EMI Group announced it would split up in two, with the two parts sold to Universal Music Group and Sony Corporation in a multi-billion dollar deal.

A number of consumer groups, lead by the Consumer Federation of America and Public Knowledge, have criticized the Universal-EMI Group merger in particular, saying that it would help kill competition in the industry. The two aforementioned groups filed “detailed comments with the Federal Trade Commission objecting” to the deal last week.

Today, the Senate Judiciary Committee held a hearing to discuss the merger.

The companies involved are spending hundreds of thousands of dollars lobbying to make their case. One of the best ways for corporations to get access to Congress is to hire lobbyists who are former Members of Congress or their staffs. Billboard.biz notes that Universal has hired a lobbying firm that employs a staffer who was the chief of staff of Senator Herb Kohl (D-WI), who chairs the Judiciary Committee:

Universal has hired Capitol Hill Strategies and the Podesta Group in recent months. Capitol Hill Strategies is a lobbying firm that employs the former chief of staff to Senator Herb Kohl, Paul Bock. Kohl is currently a member of the Senate Judiciary Committee and is chairman of the subcommittee that will hold Thursday’s hearing. Block worked on Kohl’s Judiciary Committee staff for two years prior to spending 12 years as Kohl’s chief of staff. “It was clearly a strategic move on their part to hire someone who knows how Senator Kohl thinks,” says [First Street Group analyst] Bronstein-Moffly.

There’s a lot of damage that the revolving door can do to our government, and by extension, America. In this case, it could undermine competition in the music industry.