The European Commission has approved the acquisition of Downtown Music Holdings by Universal Music Group N.V., but only after requiring the divestment of Downtown’s royalty accounting subsidiary, Curve Royalty Systems. The decision follows an in-depth Phase II investigation under the EU Merger Regulation and addresses concerns about access to commercially sensitive data.
UMG is one of the world’s largest music companies, active in recorded music, publishing, merchandising and audiovisual content. Downtown provides digital distribution, artist and label services, and publishing support, with a strong focus on independent labels and artists. While the Commission found that the merger would not significantly harm competition in recorded music, artist and label services, or publishing, it identified a serious issue relating to Curve’s royalty accounting platform.
Curve processes detailed information about the commercial relationships between artists and record labels. The Commission concluded that, without remedies, UMG could gain access to sensitive data belonging to rival labels. Such access could have given UMG strategic insights into competitors’ profitability and market trends, potentially distorting competition in wholesale music distribution.
To resolve these concerns, the companies committed to fully divesting Curve, including its customers, contracts, staff, and technology. The buyer will operate Curve independently, and UMG will only receive a limited transitional software license without access to customer data. An independent trustee will oversee the implementation of the commitments.
The music industry plays an important role in bringing artists’ creations to audiences, and it is essential to uphold the availability of diverse service providers for consumers. Our in-depth investigation confirmed that a large number of companies will continue to offer their distribution services to European music labels and artists. By requiring the divestment of Curve, we are taking a decisive step to protect sensitive data and prevent it from being controlled by a large competitor. Today’s decision reflects the Commission’s dedication to promoting fair competition and supporting a thriving and diverse music landscape in Europe. – Valdis Dombrovskis, Commissioner for Economy and Productivity; Implementation and Simplification
The Commission concluded that, with the divestment in place, the transaction no longer raises competition concerns and can proceed.