The European Union is expected to approve Universal Music Group’s $775 million acquisition of Downtown Music Holdings as soon as this week, following a remedy UMG submitted in December that it says addresses regulators’ concerns over its access to commercially sensitive data.
The European Commission’s probe, launched last year, centered on concerns that the deal would reduce competition by giving UMG access to sensitive data from rival labels through Downtown’s Curve royalty accounting and rights management business, as well as its artist and label services.
The Financial Times first reported on Wednesday (Feb. 11) that the European Commission (EC) is planning to approve the deal this week, and sources say the plan UMG submitted in December included conditional commitments to spin off these divisions of Downtown.
UMG and Virgin Music Group, which would oversee the acquired entity, declined to comment. Representatives from the European Commission did not immediately respond to a request for comment.
Trade groups representing the independent side of the music industry in Europe say that, regardless of the outcome, they see a win in the European Commission’s lengthy two-phase investigation of the acquisition and the remedies it was able to secure from UMG.
“Entities planning consolidation need to expect full scrutiny and regulator appetite to make full use of what they have in their toolkit,” Martin Mills, founder and chair of Beggars Group, said through a statement provided by IMPALA. “The unprecedented speaking out we have seen in the independent sector sends a clear message that the concerns are real. A level playing field is in the interests of all.”
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Founded as a music publisher in 2007, Downtown has grown into a major provider of distribution, royalty accounting and rights-management services to record labels and artists. In addition to Curve, it owns the distribution services FUGA and CD Baby and the publishing administration provider Songtrust.
UMG, the world’s largest music company, announced in December 2024 that its Virgin Music Group would buy Downtown to position Virgin to provide labels and artists with a “global end-to-end solution” for client services and technology.
The move sparked fears of UMG dominance over one of the few remaining large distribution companies for independents. In July, a group of more than 200 executives and others from the independent music industry said the deal would give UMG too much power over the basic logistics of the modern music business.
“A concentration of this magnitude would narrow the range of voices, styles and cultures that reach the public,” the letter read. “It would give UMG further power to shape digital services, influence monetization thresholds and extract more, at the expense of the independent sector.”
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UMG and Virgin have said that acquiring Downtown’s suite of companies does not dramatically reduce the options in independent services. The market remains so fragmented, they say, that even with Downtown, Virgin would rank behind Sony’s The Orchard and Believe in terms of market share.
Virgin’s executives have called concerns over proprietary data of competing companies overblown.
“Virgin already handles — with the care and confidentiality they deserve — the sensitive client data of hundreds of partners,” Virgin’s co-CEOs Nat Pastor and JT Meyers wrote in an internal memo reported by Billboard last year. “Betraying the trust our clients have bestowed on us would be self-destructive: they would quickly, and quite rightly, end the relationship.”
