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The European Commission has given its final stamp of approval for Universal Music Group’s $775 million acquisition of Downtown Music Holdings, concluding a two‑phase review that focused on competition and data‑access risks tied to Downtown’s services business.
The proverbial thumbs-up, announced early Friday (Feb. 13), follows remedies UMG submitted in December to address regulators’ concerns over access to commercially sensitive information from rival labels via Downtown’s Curve Royalty Systems, its accounting and rights‑management platform, as well as its broader artist and label services operations.
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The European Commission said on Friday that it approved the deal on the condition that UMG and Downtown fully divest Curve. Regulators found the merger, as initially notified, could have given UMG access to rivals’ sensitive data stored on Curve. The remedy requires selling all of Curve (customers and their data, contracts, staff, platform/source code/algorithms and Curve‑only hardware). UMG will get only a limited, data‑free transitional license for restricted internal use. An independent trustee will oversee compliance, the EC will approve the buyer, and Curve will operate as a stand‑alone business until the sale closes.
Beyond Curve, the EC concluded the merger does not significantly impede competition in recorded music, publishing and other services as there are “several viable competitors” with low switching costs, combined market shares are moderate, and that “the proposed transaction will not significantly shift the negotiation position of UMG in its licensing discussions with DSPs.”
“Bringing Downtown’s exceptional team and capabilities to Virgin Music Group means greater flexibility and a sharper set of services for independent entrepreneurs, artists and labels,” said Nat Pastor and JT Myers, Virgin Music Group co‑CEOs. “By uniting two culturally compatible companies with deeply complementary strengths, we’re creating a more powerful, more open ecosystem… We appreciate the European Commission’s thoughtful review and look forward to welcoming our new Downtown partners and colleagues.”
Pieter van Rijn, CEO of Downtown Music, added: “By joining forces with Virgin Music Group, we’re helping build a more diverse, dynamic and opportunity‑rich environment—one that amplifies independence and expands the cultural impact of the extraordinary partners we serve.”
Trade association IMPALA, which represents Europe’s independent sector, called the decision a landmark that underscores the EU’s readiness to intervene in culture‑defining markets — while warning that allowing the market leader to grow larger “falls short.”
“We thank the European Commission for their determination… to securing structural concessions,” said Helen Smith, IMPALA’s executive chair. “With only 1% of mergers in 2025 going to Phase II and a conclusion arriving fourteen months after the deal was struck, the EC is sending a clear message about the risks of expansionist policies in music. At the same time, the final outcome falls short.”
UMG announced in December 2024 that Virgin Music Group would acquire Downtown to build a global, end‑to‑end services platform for independent artists, labels, and rights holders. The plan combines Downtown assets — historically including FUGA, CD Baby, Songtrust, and Curve — with Virgin’s global distribution, marketing, BI, neighboring rights, sync, royalties and rights‑management capabilities. (Curve, per the remedy package, will be spun off.)
The proposed deal sparked intense debate across the independent sector last year, with more than 200 executives warning that further consolidation risked narrowing choice and concentrating leverage. UMG and Virgin countered that the indie services market remains highly fragmented, and that even with Downtown they would trail The Orchard (Sony) and Believe (which owns TuneCore) in share. Virgin also dismissed data‑misuse fears as unfounded, saying the company already handles sensitive client information confidentially.
This is a developing story…