The European Commission is preparing to open a full-scale antitrust investigation into Universal Music Group’s (UMG) proposed $775 million acquisition of Downtown Music, according to sources familiar with the matter.
The transaction, announced in December 2024 by UMG’s Virgin Music Group, has faced mounting criticism from European independent labels over its potential impact on competition and market access, Reuters reported.
The Commission’s preliminary review of the deal is scheduled to conclude on July 22. However, UMG did not submit any remedies by the July 16 deadline to address regulatory concerns, as noted in an official update on the Commission’s website. The absence of proposed remedies effectively clears the way for the EU competition authority to initiate a four-month in-depth investigation.
If launched, the investigation would assess whether the acquisition significantly impedes effective competition in the European Economic Area (EEA), particularly within the music publishing and distribution sectors.
A spokesperson for Virgin Music declined to comment directly on the investigation, stating only that the European Commission has yet to issue any decision. The company affirmed its commitment to cooperating constructively with regulators and challenged what it called the “wilful misrepresentation of market data by self-interested parties who represent a tiny fraction of the thousands of independent labels that make up the broader independent community globally.” The company maintains its expectation that the deal will close in the second half of 2025.
Universal Music Group, the world’s largest music company, is seeking to expand its reach through Downtown Music’s publishing and royalty collection services. However, several stakeholders have raised alarms over the potential consolidation of power in an already highly concentrated market.
Leading the opposition are the European independent label association Impala and the European Composer and Songwriter Alliance (ECSA). These groups, along with the Worldwide Independent Network, have called on the Commission to scrutinize — and if necessary, block — the acquisition. They argue that the transaction would further entrench Universal’s dominance and diminish access to market channels for independent music creators and labels.
“The deal threatens the ability of independent artists and labels to compete on fair terms,” said a joint statement issued by the three groups earlier this year. “Universal’s expanded control over music publishing and distribution poses serious risks to diversity, innovation, and market access in the European music sector.”
The case is likely to draw significant attention, both within the EU and globally, as regulators continue to grapple with the competitive dynamics of digital content markets. A full investigation could result in substantial remedies, delays, or even a prohibition of the deal, depending on the Commission’s findings.
