The EC mentioned its preliminary overview raised issues that the deal would give UMG access to Downtown’s “commercially sensitive data of third-party record labels.”
Widespread Tune Neighborhood corporate locations of work on December 22, 2020 in Santa Monica, California.
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The European Union’s antitrust regulator mentioned on Monday (July 21) that it opened an “in-depth,” second share of its investigation into whether Widespread Tune Neighborhood’s belief to function Downtown Tune Holdings would worry competition for song distribution and artist and sign companies and products there.
The commission’s preliminary overview of UMG’s $775 million address Downtown concluded that the merger could well moreover give UMG commercially sensitive data about its rival file labels and “eradicate Downtown as a needed competitive drive within the market for [artist and label] companies and products.” The regulator, which has the authority to overview the transaction because UMG is headquartered within the Netherlands, now has till Nov. 26 to topic a resolution.
“By buying Downtown, UMG would buy a nice provider of companies and products for labels that compete with UMG and for artists. Opening an in-depth investigation will enable us to assess extra in moderation whether this acquisition would have a negative impact on artists, labels and, in a roundabout plan, European patrons,” Valdis Dombrovskis, the group’s commissioner for financial system and productivity, implementation and simplification, mentioned in a assertion.
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If the deal is popular, the world’s largest song company would buy one among the largest unbiased song companies and products and distribution corporations. That prospect has sparked an outcry from indie song alternate corporations and organizations.
A UMG spokesperson didn’t without extend acknowledge to a quiz for observation, nonetheless the company has previously mentioned it is staring at for the European Commission’s remaining resolution and is confident the merger would improve its providing to artists, labels and other unbiased song corporations.
Founded in 2007 in New York, Downtown Tune Holdings is the parent company of the divulge-to-creator distributor CD Child and the divulge-to-industry skills and distribution platform FUGA, as properly as SongTrust and loads of different other corporations.
Europe’s unbiased song alternate group IMPALA, which represents spherical 6,000 indie song corporations and associations, welcomed the second share of the European Commission’s investigation and mentioned it hopes the regulator will block the deal, primarily primarily based on a press launch. The group argues that the tie-up between UMG’s Virgin Neighborhood and Downtown poses a principal threat to competition in share because it follows UMG gaining a majority possession stake within the indie sign group [PIAS] in 2024 and procuring for the Netherlands-primarily primarily based indie group called 8ball earlier this 365 days.
“Our topic is merely that there is some degree at which mountainous turns into too mountainous,” IMPALA mentioned in a assertion. “This acquisition desires to be stopped outright in describe to elevate away from one company leveraging its market energy to shape the song ecosystem to its advantage.”
The European Commission mentioned its issues center on Downtown’s characteristic in processing “commercially sensitive data of third-occasion file labels,” which it says UMG could well moreover employ to advantage its recorded song division whereas harming competitors. It moreover famed that UMG is already “the leader within the market for the wholesale distribution of recorded song within the EEA.”
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