Universal Music Group‘s planned $775 million acquisition of Downtown Music Holdings, the parent company of independent distributors Fuga and CD Baby, could face European Union (EU) scrutiny after the Dutch regulator made a referral request for a competition inquiry. The European Commission, the main executive body of the EU, has not announced any official decision on the topic though.
Universal (UMG)’s proposed takeover of Downtown via the music major’s Virgin Music unit is part of the company’s consolidation strategy. When the transaction was unveiled in December, UMG said it was expected to close in the second half of 2025, pending regulatory approvals.
IMPALA, the trade body of European independent labels, and Britain’s Association of Independent Music (AIM), representing indie record labels in the U.K., have expressed their support for an inquiry.
“IMPALA has consistently called on regulators to take action against UMG’s ‘juggernaut’ strategy of serial acquisitions to gatekeep market access and exert power over digital services, as well as control a whole host of essential services across the music market, from publishing to recording, distribution and royalty accounting,” IMPALA said in a statement. “This threatens music fans, as well as independent artists and labels.”
It added: “UMG has already bought PIAS, one of the biggest independent labels and distributors. Downtown is home to two of the world’s biggest distributors Fuga and CD Baby, used by many independent labels and artists, and a host of other businesses providing key services in the music sector.”
Helen Smith, executive chair of IMPALA, said: “This referral is a crucial step towards putting a stop to UMG’s juggernaut strategy. It shows two things: that regulators see the threat that this strategy poses to the market, and that the consequences go beyond national borders. It’s Europe’s competition, Europe’s diversity as a whole that is at stake.”
AIM CEO Gee Davey called the Dutch referral “only right,” adding: “We now look to authorities in other countries that are affected by UMG’s aggressive strategy to take note.” And she called on the British regulator, the Competition and Markets Authority (CMA), to follow suit. “We are encouraging the CMA to assess the impact in the U.K. and similarly take a tough stance.”
UMG has emphasized the benefits it sees in boosting its reach and scale. The Downtown deal “will enhance our capabilities in serving the independent music community,” UMG CEO Lucian Grainge said in a recent earnings conference call. “By investing in businesses like Downtown that can and do support today’s leading music entrepreneurs, we can also help to advocate for advanced policies and practice that will further protect and grow the entire music system.”
UMG CFO Boyd Muir argued on the same call: “The reason so many independent music entrepreneurs actively seek to partner with UMG, when they have more alternatives than ever before, is that we provide what they’re seeking – the most innovative creatives and the finest resources to advance their artists’ careers.”
Originally established as a music publishing company in 2007, Downtown now has more than 20 offices across the world with divisions in artist and label services, distribution, royalty and financial services and music publishing. Its business also includes Downtown Artist & Label Services, Curve Royalties, and Songtrust.
Read the full article here
