Universal Music wins conditional EU nod for Downtown acquisition
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FILE PHOTO: Universal Music Group logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Foo Yun Chee and Gianluca Lo Nostro
BRUSSELS, Feb 13 (Reuters) - Universal Music Group secured EU antitrust approval for its acquisition of Downtown Music on Friday after agreeing to sell the latter's royalty services platform to address competition concerns.
The $775 million deal, via Universal unit Virgin Music Group and announced in December 2024, triggered criticism and pushback from a wide swathe of independent labels, which were worried about the boost to Universal's market power and wanted the deal to be blocked.
The European Commission, which acts as the EU competition enforcer, said the divestment of Downtown's Curve Royalty Systems will prevent UMG from obtaining access to the commercially sensitive data of its rivals stored on Curve.
It pointed to the presence of rivals in the market including Sony Music Entertainment, Warner and independent artist and label service providers such as Believe, Distrokid, IDOL, Kontor or ONErpm.
The EU antitrust watchdog said the deal would not significantly increase UMG's power in licensing discussions with Spotify, Apple Music and Amazon Music. Universal's roster of artists includes Taylor Swift, SZA, Billie Eilish and Drake.
"Today's decision reflects the Commission's dedication to promoting fair competition and supporting a thriving and diverse music landscape in Europe," Economic Commissioner Valdis Dombrovskis said in a statement.
Reuters reported exclusively on the imminent EU approval last month.
Downtown and Virgin Music, the UMG unit that is taking it over, welcomed the Commission's decision.
"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," Nat Pastor & JT Myers, co-CEOs of Virgin Music Group, said in a statement.
(Reporting by Gianluca Lo Nostro and Yun Chee Foo; Editing by Inti Landauro and Anil D'Silva)
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