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The European Commission has initiated an in-depth antitrust investigation into Universal Music Group’s (UMG) proposed $775 million acquisition of Downtown, a global music services company.
The probe, announced Tuesday, stems from concerns that the deal could significantly reduce competition within the music industry.
Independent music companies had previously urged the EU to examine the acquisition, fearing it would further entrench UMG’s already dominant position.
Valdis Dombrovskis, the EU’s economy commissioner, stated that the investigation will “allow us to assess more carefully whether this acquisition would hurt artists, labels, and, ultimately, European consumers.”
UMG, headquartered in the Netherlands, is the world’s largest music company, boasting a roster that includes superstars like Taylor Swift, Billie Eilish, and Kendrick Lamar.
US-based Downtown Music, conversely, offers crucial services to independent labels and musicians, such as copyright management and royalty collection.
The EU’s preliminary assessment suggests that the acquisition could grant UMG access to commercially sensitive data from rival record labels via Downtown.
This data, the Commission fears, could then be leveraged by UMG to unfairly bolster its own recorded music business, potentially “harm[ing] rival record labels and… further strengthening UMG.”
The European association of independent music companies, Impala, had warned in April that the merger could “hit both consumers, who risk facing higher prices, as well as independent labels and artists and other parts of the music sector.”
Brussels has set a deadline of November 26 to reach a decision on the acquisition following the in-depth investigation.
