The European Commission is now reviewing the proposed Universal Music Group buyout of Downtown Music Holdings. Photo Credit: Guillaume Périgois
Following ample competition-related criticism and a couple investigation referrals, the European Commission has moved “to examine” Universal Music Group’s proposed Downtown buyout.
The EU executive arm just recently made the inquiry official, weeks after receiving the mentioned referrals from competition watchdogs in the Netherlands and Austria.
As we noted at the time, these regulatory concerns didn’t necessarily mean that a full-fledged investigation was in the cards. However, they did arrive on the heels of considerable pushback from organizations including IMPALA, a vocal critic of “UMG’s juggernaut strategy.”
Evidently, the indie sector’s opposition and the referrals were enough to spur action from the Commission, which believes the $775 million buyout “threatens to significantly affect competition” in the music world.
“In particular,” the European Commission wrote, “the transaction threatens to significantly affect competition in certain markets of the music value chain, where both companies are active, in Austria and in the Netherlands, as well as in many other Member States.
“The Commission has therefore concluded that it is best placed to examine the transaction,” the EC proceeded. “The Commission has asked UMG to notify the transaction. UMG cannot implement the transaction before notifying and obtaining clearance from the Commission.”
It probably doesn’t need saying, but especially in light of the EU’s aggressive regulatory approach, it’ll be interesting to see how the investigation plays out. Per the Commission, updates will be posted to its register (case number M.11956 here) moving forward.
More immediately, Universal Music in a statement said it remains confident that the Downtown purchase (which the major initially announced in mid-December 2024) will wrap “in the second half of the year, on its original timeline.”
IMPALA and its members, on the other hand, applauded the development and doubled down on a push for a separate investigation across the pond.
“The news about the EU shows the way for other jurisdictions to intervene,” AIM CEO Gee Davy reiterated in part. “We call on the UK to follow, given the importance of the music market to the UK economy.”
Meanwhile, with the Commission’s investigation now in motion, IMPALA executive chair Helen Smith took things a step further by calling for the UMG-Downtown deal to be “blocked entirely.”
“Like any sector,” Smith relayed in part, “the music market needs big companies of course, as we already flagged, there is simply a point at which big is too big. In this case, UMG clearly exceeded the maximum even before adding Downtown. This deal must be blocked entirely.”
