The European Commission has finally moved to approve the merger of University Music Group (UMG) and Downtown Music Holdings (Downtown). After a comprehensive investigation that started last summer, the European Commission has approved the $775 million acquisition of Downtown. The news broke on February 13th that the EU investigation was complete.
This is a conditional approval subject to UMG’s commitment to divest Downtown’s Curve Royalty Systems, LTD (Curve), the company’s royalty accounting platform. What this means for entertainers is still concerning.
The deal, originally announced in December 2024, was significantly delayed due to the EU’s executive branch investigation that began in the summer of 2025. Numerous objections were heard about the merger, including those from the Commission.
Expectations of Integration Are Likely
Sources state that UMG will likely integrate Downtown into Virgin, the company’s independent music division. In recent years, Virgin has become more of an artist-services company. Downtown, a music publisher, sold its $300 million in publishing assets to Concord in 2021. At that point, the company shifted its focus to its growing artist services division.
Independent Labels Continue to Question the Risks
Various independent labels have come forward to oppose the acquisition. They believe that other subsidiaries, including CD Baby and Songtrust. They fear that, should the deal go through in its current form, there will be a significant imbalance in the industry. UMG will have an even larger dominance in the market.
In 2025, over 200 representatives from independent labels petition in opposition to the merger. That includes organizations such as Sub Pop, Beggars Group, 4AD, and Secretly Group. The opposition letter, published by IMPALA, an indie label association, makes the point that this merger reduces the “choices for consumers, stifles experimentation, and undermines Europe’s role as a vibrant incubator of musical and artistic expressions.” They believe fans will suffer the most from the incident.
What the EU Commission Found
The EU investigation report, released by the European Commission, says that the organization gathered extensive feedback from numerous suppliers, including industry rivals in the recorded music and A&L services, digital service platform labels and artists, and international music associations.
The Commission failed to see a reason to block the merger, stating, “There are several viable competitors, such as Sony Music Entertainment, Warner, and many other independent A&L service providers such as Believe, Distrokid, IDOL, Kontor, or ONErpm. The investigation also confirmed that the switching between these alternative service providers is already happening, and is neither costly nor time-consuming.”
It concluded that, based on its market share verification exercise, the Commission was able to confirm that “the combined market shares of UMG and Downtown in recorded music and A&L services remain moderate in any of the relevant markets.”
The Commission does not believe that the merger will significantly shift the UMG presence or negotiating power in any way.
However, the Commission believed that the Curve possessed information related to commercial relationships between artists and its label, and that allowing the transaction to move forward with Curve’s data assets would have been damaging.
The Commission brought forward a proposed remedy that would require Downtown to fully divest Curve, including all customers and their data, all supply contracts, all Curve personnel, and the Curve platform.
The Potential Impact on Artists Is Uncertain, But Concerning
The acquisition of Downtown by UMG remains concerning to independent artists and labels, even as Curve’s divestment occurs. Independent musicbodies believe the delay will reduce the options for artists, and as such, create an unfair bargaining opportunity, making it challenging for artists to receive fair treatment in streaming services and in distribution.
Alternatives for independent artists indeed exist, but the move gives UMG more control over the independent supply chain, as well as data and intelligence, than can seem beneficial to the industry as a whole. This could benefit UMG’s major label interests already in place.
It’s uncertain if any attempts are still possible to pull back on the deal. The EU stands firm in the fact that the EU Merger Regulation threshold was not met in such a way that would have allowed the Commission to overturn the merger.
