BRUSSELS, Belgium (CelebrityAccess) — The European Commission has announced plans to undertake a comprehensive review of Universal Music Group’s proposed acquisition of Downtown Music, an independent music services company. This inquiry aims to address concerns that the acquisition could potentially restrict competition in the wholesale market for recorded music distribution within the European Economic Area (EEA).
Specifically, the investigation will examine whether UMG’s access to commercially sensitive data from competitors, including independent labels, might diminish market competition.
Additionally, the inquiry will assess the impact on competition in the artist and label supply market, potentially reducing competitive options within the EEA.
Although the proposed acquisition did not initially trigger mandatory EU merger review thresholds based on turnover, the Commission initiated this inquiry due to meeting relevant national notification thresholds in Austria and the Netherlands.
The Commission expects to conclude its investigation of the proposed merger no later than November 26th.
Valdis Dombrovskis, Commissioner for Economy and Productivity, emphasized the rationale behind the investigation, stating, “By acquiring Downtown, UMG would gain significant influence over service providers competing with UMG and for artists. Conducting an in-depth investigation will enable us to carefully assess whether this acquisition would adversely impact artists, labels, and ultimately, European consumers.”
In response to the Commission’s decision, Helen Smith, Executive Chair of IMPALA, a trade association representing Europe’s independent label sector, commented, “The European Commission’s decision underscores the seriousness of this case. While every sector benefits from strong industry leaders and viable exit options for founders, there is a critical threshold beyond which size becomes detrimental to the ecosystem. We support the EC’s decision to delve deeper, advocating that blocking this transaction is essential to preserving competition and diversity.”
