By Mauro Orru

A group of independent music companies and trade associations called on the European Union to launch an in-depth investigation into Universal Music Group's plans to acquire Downtown Music Holdings, saying the deal threatens competition and growth across the music industry.

Universal entered into a definitive agreement in December for its Virgin Music Group label to acquire Downtown for $775 million in cash, hoping to tap its services across music publishing, distribution and royalties. Founded in 2007, Downtown now serves over 5,000 clients from more than 20 offices around the world.

Universal, the record label behind Taylor Swift and Lady Gaga, said last year that the combination--expected to close in the second half of 2025--would make it easier for the two companies to serve customers in the independent music scene.

However, more than 200 executives, founders and other representatives of the sector said handing Downtown's distribution, royalty accounting and rights-management services to Universal would make the group even more powerful, distorting competition.

In a letter to EU competition chief Teresa Ribera, they said the deal would force many independent music businesses that are already tied to Downtown's services to turn to Universal, which controls more than 40% of the recorded music market across Europe, citing data from research firm Omdia.

Signatories to the letter include Richard James Burgess, president and chief executive of the American Association of Independent Music; Andrew Cash, president and CEO of the Canadian Independent Music Association; and Jeremy Lascelles, CEO and co-founder of Blue Raincoat Music.

"We must have fair and non-discriminatory access to the best infrastructure in the music economy. And not be forced into structural dependence on our biggest competitor who is also shifting payment models on digital services," the letter said. "We therefore urge the European Commission to open a detailed phase two investigation to examine the deeper structural consequences of this transaction."

The European Commission, Universal and Downtown didn't respond to requests for comment.

The European Commission, the EU's executive arm, is already looking into the deal and has set a July 22 deadline to either approve the merger or launch a more in-depth investigation if antitrust officials believe it could pose a threat to competition.

The letter from more than 200 representatives of the industry comes days after the European Composer and Songwriter Alliance, which represents more than 30,000 composers and songwriters in 28 European countries, called on the European Commission to block the deal.

ECSA said the acquisition would stymie competition and reduce the freedom of choice for composers and songwriters since the music market is already dominated by a handful of global players.

"The promise of the digital era was to create a level playing field for music creators, promoting cultural and musical diversity, and empowering artists, songwriters and composers," ECSA President Helienne Lindvall said in a statement. "Instead, we are now seeing large multinationals hoovering up their competition and limiting our options and negotiation power."

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 07, 2025 06:32 ET (10:32 GMT)

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