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Universal Music Group’s ambitious move raises eyebrows in Brussels

The planned takeover of Downtown Music Holdings by Universal Music Group (UMG) has caught the attention of the European Commission. Even though the deal didn’t trigger the usual revenue thresholds for merger review, the Netherlands and Austria formally requested the Commission’s intervention under Article 22(1) of the EU Merger Regulation. The request was accepted, giving the EU authority to assess the potential impact of the merger across their markets.

Downtown, an independent US-based company, provides services like copyright management, royalty payments, and artist support — mainly to small labels and independent musicians. Its tools include FUGA, a digital distribution platform, and Curve, a royalty accounting system.

UMG, one of the world’s largest music companies, already controls major segments of the industry — from wholesale music sales to publishing, merchandising, and audiovisual content.

Confidential Data: The New Weapon in the Battle for Market Power

According to the Commission’s initial findings, the acquisition could give UMG access to sensitive business data from competing music companies.

Because Downtown supports many third-party clients, it processes confidential data like sales figures, promotional strategies, streaming analytics, and upcoming release plans. UMG, as a dominant player, could gain an unfair advantage by accessing this data — either by predicting competitor moves or reshaping the market in ways that squeeze out smaller players.

This raises big questions about fair competition in the European Economic Area (EEA). Could the merger allow UMG to strengthen its already powerful position by leveraging information that should remain private?

The Commission hasn’t made any final decisions yet, but it warns that such access could undermine the level playing field needed for a healthy and diverse music ecosystem.

A&L services: helping indie artists stay independent

Another area of concern is Downtown’s Artists & Labels (A&L) services, which provide independent musicians and record labels with marketing, promotion, data analytics, and distribution support.

If UMG acquires Downtown, it would also gain control of these tools — and become a key service provider even for its own competitors.

Losing independent platforms like this could seriously limit options for smaller artists and labels. Without alternatives, they might have no choice but to rely on the industry’s biggest player — or miss out on opportunities for exposure and growth.

While nothing is certain yet, this potential scenario could threaten artistic diversity and innovation in the EU. It also raises the question: how ready is the EU to stop the growing vertical integration of the music industry?

What happens now: the process and the power to intervene

Every merger notified to the Commission must be checked to ensure it doesn’t harm competition in the EEA. Most are approved quickly in “Phase I” within 25 working days.

But this case has moved to “Phase II,” meaning a deeper investigation is needed. The Commission now has 90 working days — until 26 November 2025 — to examine the deal thoroughly. It can approve it, impose conditions, or block it entirely.

Even so, past cases show that even when risks are identified, remedies don’t always fully eliminate structural problems. Will this time be different?

A bigger picture: music isn’t the only sector under pressure

UMG’s takeover of Downtown fits into a broader trend of growing consolidation across the digital music and content industries. Big companies are increasingly bundling production, distribution, marketing, and data services into single corporate structures.

This puts extra pressure on smaller players, who not only need great content — but also access to the right infrastructure — to compete.

Right now, the Commission is also investigating another Phase II case: Mars’s proposed acquisition of Kellanova. This shows that the competition concerns extend far beyond music.

The big question is whether the EU’s current merger control tools are strong enough to address new types of integration — especially where market power stems not just from size, but from exclusive access to data and digital ecosystems.

What’s at stake for the future of music?

EU Commissioner Valdis Dombrovskis has emphasized that the Commission is taking this matter seriously.

“By acquiring Downtown, UMG would take over a major service provider to labels and artists that compete directly with UMG. Launching this in-depth investigation will help us assess whether the deal could negatively impact artists, labels, and, ultimately, European consumers,” said the Latvian official.

Keeping the music industry open and diverse — where independent creators have access to meaningful services and distribution choices — requires more than just merger reviews. It calls for a broader strategy involving data transparency, platform interoperability, and ethical standards for managing culture in a digital age.

The UMG-Downtown case will be a key test of whether EU institutions can rise to this challenge.

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