EU probes Universal Music Group's $775 mn Downtown bid

The European Commission kickstarted an antitrust investigation on Tuesday into Universal Music Group's $775-million acquisition of global music services company Downtown over concerns the deal could reduce competition.

Independent music companies had urged the EU earlier this year to launch a probe into the deal, fearing it would allow UMG to substantially increase its music industry dominance.

"Opening an in-depth investigation will allow us to assess more carefully whether this acquisition would have a negative impact on artists, labels and, ultimately, European consumers," said the EU's economy commissioner, Valdis Dombrovskis.

Headquartered in the Netherlands, UMG is the world's biggest music company and is home to the likes of Taylor Swift, Billie Eilish and Kendrick Lamar.

US-based Downtown Music provides services to independent record labels and musicians, including managing copyright issues and helping artists collect royalties.

The EU's powerful antitrust regulator has the power to block a merger if it finds that an acquisition would threaten competition in the European Economic Area, made up of the bloc's 27 states, Iceland, Liechtenstein and Norway.

The EU's preliminary assessment found UMG's bid may allow it to acquire commercially sensitive data of rival record labels via Downtown, which the group could then use for its own business activities notably related to recorded music, the commission said.

"UMG's access to such data may harm rival record labels and may ultimately have the effect of further strengthening UMG," the commission said.

Brussels said it has until November 26 to take a decision after the in-depth probe.

The European association of independent music companies Impala in April listed the risks the merger posed, warning it would "hit both consumers, who risk facing higher prices, as well as independent labels and artists and other parts of the music sector".