The European Commission has opened an in-depth investigation to assess, under the EU Merger Regulation, the proposed acquisition of Downtown by Universal Music Group (‘UMG’). There are preliminary concerns that the transaction may allow UMG to reduce competition in the wholesale market for the distribution of recorded music in the European Economic Area (‘EEA’) by acquiring commercially sensitive data of rival record labels. There are also concerns that the transaction may enable UMG to diminish competition in the market for the supply of artist and label (‘A&L’) services in the EEA by eliminating a significant competitor. A&L services mainly include distribution services to third-party labels and artists, such as monetization, marketing, promotion, as well as data analytics and management.

UMG is globally active in music recording, music publishing, merchandising, and audiovisual content. Downtown is a global music company providing A&L services to independent record companies and artists, notably through its FUGA music distribution platform. Downtown also offers royalty accounting services via its Curve platform, which provides processing, accounting, payment, and distribution services related to royalties and rights management.

The Commissions preliminary concerns

The Commissions preliminary investigation indicates that the transaction may allow UMG to acquire upstream commercially sensitive data of its rival record labels. In particular, the Commission preliminarily found that:

• Downtown processes commercially sensitive data of third-party record labels.
• After the acquisition, UMG would likely have the ability and incentive to use commercially sensitive data of third-party record labels for its own business activities, particularly related to recorded music.
• UMGs access to such data may harm rival record labels and could ultimately lead to a further strengthening of UMG, which is already the market leader in the wholesale distribution of recorded music in the EEA.

Furthermore, the Commissions preliminary investigation also indicated that the transaction may eliminate Downtown as a significant competitive force in the market for A&L services.

Therefore, the Commission will now conduct an in-depth investigation into the effects of the transaction on competition to determine whether its initial concerns will be confirmed.

The proposed transaction was notified to the Commission on 16 May 2025. The Commission now has 90 working days, until 26 November 2025, to make a decision.

The opening of an in-depth inquiry does not prejudge the outcome of the investigation.

Referral request

The proposed transaction did not meet the turnover thresholds of the EU Merger Regulation. However, it was notified for merger control clearance in Austria and the Netherlands, where it met the relevant national turnover-based notification thresholds.

The Dutch competition authority submitted a referral request to the Commission pursuant to Article 22(1) of the EU Merger Regulation. The Commission accepted the request from the Netherlands, which was joined by Austria. The Commission will assess the impact of the acquisition of Downtown by UMC within the territory of these Member States under the EU Merger Regulation.

Companies and products

UMG is a global company headquartered in the Netherlands that owns and operates businesses engaged in wholesale recorded music, music publishing, merchandising, and audiovisual content.

Downtown is a global independent rights management and music services company, headquartered in the US. It provides A&L services to third-party record artists and labels, music publishing services to third-party authors and songwriters, as well as royalty collection and other ancillary services to third-party artists and labels.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or a substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

In addition to the current transaction, there is currently another ongoing Phase II merger investigation: the proposed acquisition of Kellanova by Mars.

More information will be available on the Commissions competition website, in the public case register under the case number M.11956.