Universal’s $775 Million Bid for Downtown Faces EU Antitrust Scrutiny

Universal Music Group (UMG.AS), through its unit Virgin Music Group, is under mounting pressure as EU regulators prepare to launch an in-depth antitrust investigation into its proposed $775 million acquisition of Downtown Music, according to three people familiar with the matter. Virgin Music first announced the deal in December 2024, immediately drawing criticism from key industry groups representing European independent labels, artists, and songwriters.

Regulatory filings show that Virgin Music had until Tuesday to propose remedies that could ease the European Commission’s competition concerns during its initial review period. No such remedies were submitted, according to an update published on the Commission’s website. The Commission’s preliminary review concludes on July 22, after which it is expected to open a four-month Phase II investigation. A spokesperson for Virgin Music said the company continues to engage “constructively” with the Commission but did not comment directly on the pending probe. The spokesperson also pushed back against what they described as “wilful misrepresentation of market data by self-interested parties who represent a tiny fraction of the thousands of independent labels that make up the broader independent community globally.”

Despite the escalating regulatory scrutiny, Virgin Music says it still expects the deal to close in the second half of 2025. Universal Music Group, the world’s largest recorded music company, generated over €10.3 billion ($11 billion) in revenue in 2024, according to its annual report. Downtown Music, meanwhile, is a significant player in music publishing and rights management, helping artists collect royalties worldwide.

The European independent sector has sounded the alarm over the acquisition’s potential impact on competition. Groups like Impala, the European Composer and Songwriter Alliance (ECSA), and the Worldwide Independent Network argue the deal would give Universal even greater control over how independent artists and labels access European markets. Impala estimates that independents currently account for about 80% of all new releases in Europe, underscoring fears that further concentration could limit market access and diversity.

The European Commission declined to comment on the ongoing review. However, the outcome will be closely watched across the industry as policymakers weigh the balance between major label consolidation and preserving space for smaller, independent players to thrive.