Universal's V2 acquisition comes under OFT scrutiny.

Indies lead concern about Universal's "creeping dominance" as OFT assesses impact on competition

The Office of Fair Trading has launched an investigation into Universal Music's acquisition of the indie label V2, in what is thought to be the first instance of the competition authority examining the power wielded by a single UK record company.

The investigation was opened on September 7, after Universal's #7m move for V2. The OFT, which regulates competition in markets, invited interested parties to submit their thoughts (and relevant evidence and statistics) on the purchase, including answers to 10 specific questions.

That process ended on September 20 and now the OFT has started its analysis. Only recently Universal was given clearance to pursue the acquisition in Austria and Germany, two of V2's most successful territories.

A spokesman for the OFT would not comment specifically about the case - other than to confirm it is investigating Centenary Music Holdings' (the company wholly owned by Universal Music) purchase of V2. However, he did say the remit of the probe will be to assess whether the acquisition would "reduce competition in the music market".

If it does then Universal could be referred to the Competition Commission, which has the power to block the merger or ask for undertakings to maintain competition.

Universal did not wish to comment on the investigation, but a source close to the deal said that it had made a voluntarily filing to the OFT at the beginning of September and was confident of obtaining clearance in four to six weeks.