The European Commission has initiated an in-depth investigation under the EU Merger Regulation concerning Universal Music Group’s (UMG) proposed acquisition of Downtown. The Commission’s preliminary assessment raises concerns that the transaction may lessen competition in the European Economic Area (EEA) wholesale market for recorded music distribution by granting UMG access to commercially sensitive data from rival record labels. Additionally, the Commission is concerned that the acquisition could diminish competition in the artist and label (A&L) services market by removing a significant competitor.
Background of the Transaction
UMG is a global leader in music recording, publishing, merchandising, and audiovisual content, headquartered in the Netherlands. Downtown, headquartered in the United States, operates internationally and provides A&L services to independent record companies and artists, notably via its FUGA music distribution platform. Downtown also offers royalty accounting and rights management services through its Curve platform, which handles processing, accounting, payment, and distribution related to royalties.
Preliminary Concerns
The Commission’s initial investigation suggests that Downtown processes commercially sensitive data from third-party record labels. If acquired by UMG, the latter could gain both the ability and incentive to use this sensitive data for its own business interests, particularly in recorded music distribution. This could harm rival labels and potentially consolidate UMG’s already dominant position in the EEA wholesale distribution market.
Moreover, the transaction may eliminate Downtown as an important competitive force in the A&L services sector, which includes distribution, monetisation, marketing, promotion, and data analytics services to artists and labels.
Next Steps
The Commission will conduct an in-depth Phase II investigation to thoroughly evaluate the transaction’s impact on competition and to confirm or dispel its preliminary concerns. The proposed acquisition was notified to the Commission on 16 May 2025, which now has until 26 November 2025 (90 working days) to reach a decision.
It is important to note that opening this investigation does not prejudge the outcome.
Jurisdiction and Referral
Though the transaction did not meet the EU Merger Regulation’s turnover thresholds, it was notified in Austria and the Netherlands due to national rules. Following a referral request from the Dutch competition authority, accepted by the Commission and joined by Austria, the investigation will focus on the effects of the acquisition within these Member States under EU rules.
Context on Merger Control
Under the EU Merger Regulation, the Commission reviews mergers that meet turnover thresholds to prevent concentrations that could significantly impede effective competition in the EEA or a substantial part of it. Most mergers are cleared after initial review, but where concerns arise, the Commission may open an in-depth Phase II investigation.
Currently, the Commission is also examining another merger in Phase II: Mars’ proposed acquisition of Kellanova.
Further details on this case, registered under case number M.11956, are available on the Commission’s competition website.
Commissioner’s Statement
Valdis Dombrovskis, Commissioner for Economy and Productivity, noted:
“By acquiring Downtown, UMG would purchase a large provider of services for labels that compete with UMG and for artists. Opening an in-depth investigation will allow us to assess more carefully whether this acquisition would have a negative impact on artists, labels and, ultimately, European consumers.“
