UMG’s Downtown Deal Nears EU Decision as Regulators Weigh Competition Concerns

Universal Music Group’s (UMG) proposed $775 million acquisition of Downtown Music Holdings is moving closer to a final ruling from European regulators, following reports that the European Commission (EC) is prepared to grant conditional approval. According to Reuters, the deal may proceed if UMG follows through on commitments to divest a key part of Downtown’s business, addressing concerns about market competition and access to sensitive industry data.

What the Acquisition Includes

The acquisition, announced in December 2024 by UMG’s Virgin Music Group, would bring several major independent-facing services under Universal’s umbrella, including music distributor FUGA, DIY platform CD Baby, and publishing administration company Songtrust. Together, these companies serve hundreds of thousands of artists and labels worldwide, making the deal significant not just for Universal, but for the broader independent music ecosystem.

Regulators flagged potential risks early in the review process. After an initial Phase I assessment, the EC launched a deeper Phase II investigation in July 2025, citing concerns that UMG could gain access to commercially sensitive data from rival labels—data processed through Downtown’s Curve royalty accounting platform.

The Proposed Remedy: Divesting Curve

To address these concerns, UMG submitted formal commitments on December 11 to sell Curve Royalty Systems as a standalone business to an independent buyer approved by the Commission. The remedies package would include transferring Curve’s software, customer contracts, and most of its staff, effectively separating the data-processing operation from Universal’s control.

The EC had previously warned that access to competitor data could give UMG an unfair advantage in the wholesale music distribution market across the European Economic Area, potentially undermining competition among distributors and labels.

Industry Pushback from the Independent Sector

UMG has framed the deal as a positive step for independent music creators. In a statement to Music Business Worldwide, the company said it had proposed “a robust remedy” and argued that the acquisition would provide independent entrepreneurs with “world-class tools and support.”

However, the deal has drawn strong opposition from independent music organizations. More than 200 industry professionals signed a letter objecting to the acquisition, and a “100 Voices” campaign launched in October featured testimonials urging regulators to block the deal. Trade group IMPALA has reiterated its call for the EC to prohibit the transaction outright, arguing that even with divestitures, consolidation at this scale threatens competition and long-term diversity in the music ecosystem.

The European Commission has until February 27, 2026, to reach its final decision, which could clear the deal with conditions, approve it outright, or block it entirely. As the deadline approaches, the case highlights a broader tension in the music industry: balancing the efficiencies of consolidation with the need to protect competition, data integrity, and independent pathways for artists and labels.