European Commission Sends Statement of Objections to UMG Regarding Proposed Downtown Acquisition

The European Commission (EC) has delivered its first major update in its investigation into the proposed acquisition of Downtown Music Holdings by Universal Music Group (UMG). Today (November 24), the commission — the independent executive branch of the European Union that manages the implementation of EU law throughout the continent — sent a Statement of Objections to UMG.

Statement of Objections:

• This does not mean the deal itself has been rejected.

• It is a formal step through which the EC expresses official concerns as a result of its investigation.

• UMG can now respond to those concerns through such means as an oral hearing or through written communication

The concerns:

• The EC expressed that UMG’s ability to access data from Downtown’s royalty accounting platform, Curve, would lead to unfair competition.

What they said:

• EC: “As a result of this in-depth investigation, the Commission is concerned that UMG may have the ability and incentive to gain access to commercially sensitive data that is stored and processed by Downtown’s Curve and that such information advantage for UMG would hamper rival labels’ ability and incentive to compete with UMG.”

• UMG: “This deal is about offering independent music entrepreneurs access to world-class tools and support to help them succeed. We look forward to continuing to work constructively with the Commission toward a successful conclusion of this process.”