The European Commission intends to investigate the acquisition of the independent music services company Downtown Music by Universal Music Group (UMG.AS) for $775 million amid claims that the deal will give too much power to the industry's largest player.
This was reported by the Financial Times, writes UNN.
Details
Representatives of independent music companies are calling on competition authorities to review and block the deal, which was announced in December 2024. They argue that this agreement will make Universal even more dominant in the music industry ecosystem. Brussels may announce an investigation into the deal soon.
Downtown Music provides a range of services in the music industry, such as copyright management, royalties, marketing, promotion and distribution on streaming platforms.
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According to European officials, the commission, which oversees EU antitrust law, will act on the basis of an appeal from the Dutch Authority for Consumers and Markets.
Universal is headquartered in the Netherlands and its shares are listed on the Dutch stock exchange. Brussels has broad powers to impose fines or block mergers that it believes violate EU competition rules.
Universal Music is the largest music company in the world. According to entertainment magazine Billboard, the Los Angeles-based group, which includes artists such as Taylor Swift and Kendrick Lamar, controlled 37% of the US market in the first quarter of 2025.
However, in recent years, major record labels - Universal Music, Sony Music and Warner Music - have seen a decline in their share of listening on Spotify.
In 2024, songs owned by the three major labels and Merlin, a group representing large independent labels, accounted for approximately 71% of total listening on the streaming service Spotify, compared to 87% in 2017.
Universal's acquisition of Downtown is the latest example of majors acquiring smaller independent labels. Sony Music acquired label services group Awal in 2021, while Warner Music acquired 300 Entertainment, rapper Megan Thee Stallion's label, in 2021 and acquired a controlling stake in Elliot Grainge's 10k Projects in 2023.
The European Independent Trade Association Impala has expressed concern about Downtown Music's ownership of independent distributors Fuga and CD Baby. It argues that Universal Music's alleged "massive acquisition strategy to control access to the market and to exert control over digital services, as well as control over a range of important services in the music market" threatens independent artists and labels.
Universal Music Group said the company "looks forward to continuing to work with the commission... We are confident that we will complete this acquisition in the second half of the year, according to the original schedule."
Addition
Swedish streaming service Spotify paid the music industry a record $10 billion in 2024. This is the largest payment in a single year