EU Presses Pause on UMG’s Downtown Acquisition

Photo Credit: Universal Music Group

EU antitrust regulators have temporarily paused an investigation into Universal Music Group’s bid for Downtown Music while awaiting more information.

The EU’s antitrust regulators have been investigating Universal Music Group’s proposed $775 million bid to acquire Downtown Music. The investigation hinges on concerns that it could hamper competition and eliminate an important competitor.

Now, the investigation has been temporarily halted on September 2 as the European Commission awaits requested information. “The ‘clock’ in merger investigations can be suspended if the parties fail to provide, in a timely fashion, an important piece of information that the Commission has requested from them (for its competition assessment) within a prescribed deadline,” said a Commission spokesperson.

The previous deadline for the EU to reach a decision was December 10, but a new deadline will be determined once the investigation continues.

Meanwhile, the proposed acquisition has been of major concern to independent labels, who have not only criticized the proposal, but have called for it to be blocked. Organizations including IMPALA, IMPF, and AIM have been protesting UMG’s proposed acquisition, which they say broadly threatens the indie sector and smaller competitors.

“This is another land grab,” said Helen Smith, Independent Music Companies Association (IMPALA) executive chair. “We expect competition authorities in key jurisdictions to carry out thorough investigations and block these deals.”

“The time has come for cutting UMG’s market position back to what was already set. This is a huge market share grab by UMG and seriously reduces independent routes to market. We look to the new European Commission to set the standard internationally.”

Smith also emphasized calls for regulatory scrutiny overall, not just into the Downtown acquisition, to determine “how it is possible for UMG to gain more market share after it was already considered too big.”

Remarks from the Independent Music Publishers International Forum (IMPF) and London’s Association of Independent Music (AIM) echoed Smith’s sentiments, calling the purchase part of a “continuing trend towards over-consolidation.”