The European commission has today started its formal investigation into UMG's acquisition of Downtown, with a provisional deadline of 22nd July to reach an initial conclusion.


This marks the beginning of its assessment of the case, following the EC's decision last month to investigate the deal on the grounds that "...the transaction threatens to significantly affect competition in certain markets of the music value chain..." in many countries across Europe.

The acquisition had already attracted the attention of the Chair of the European Parliament's most influential committees, French economist and parliamentarian Aurore Lalucq, in a formal written question to the European Commission's Executive Vice President in charge of competition matters, Teresa Ribera. 

On Friday, former Chief Economist of the UK competition authority, as well as artist and independent music label co-founder, Professor Amelia Fletcher, sent an open letter (here) urging the EC to go to an in-depth investigation. Fletcher noted that the acquisition represents "another step in UMG's broader strategy of undermining the vitality and viability of the independent music sector" and that it is "vital that this anti-competitive process is stopped".

This echoes the issues raised in a new report released last week "Combating the Emergence of a Two-Tier Music Streaming Market" where industry experts Dan Fowler and Katherine Basset identify "...a widening gulf between large rightsholders and independent actors, driven by market consolidation, opaque platform policies, and emerging monetisation practices that increasingly favour scale over diversity; the emergence of a two-tier industry." 

Responsibility for the case lies with the Executive Vice President of the European Commission, Teresa Ribera who is the EC's competition chief and who slapped big fines on Apple and Meta in April, following her appointment in December last year.  

Helen Smith, IMPALA Executive Chair commented:"We welcomed the news last month that the EC had decided to investigate and we have been keen to see the assessment get started, so this is great news. There is only one outcome to prevent harm and that is for the EC to block this outright, to secure balance, harmony and diversity in the ecosystem."

Dario Draštata, Chair of IMPALA, President of regional association RUNDA Adria and Executive Director of Dallas Records, added: "Once again the EC is taking the lead in these cases and we know how important music and diversity are to the European economy. We look forward to providing further input to the EC's examination of the implications of what the market leader is attempting to get through."

Francesca Trainini, IMPALA President and Vice President of Italian association PMI, continued: "We agree with Professor Fletcher's views as a renowned economist and former regulator, as well as an artist and a label founder, in her letter to Executive Vice President Ribera on Friday. This follows concerns raised previously by Aurore Lalucq, also an economist, as well as the chair of one of the European Parliament's most influential committees."

Gee Davy, CEO of AIM, Association of Independent Music, concluded: "We repeat our call for the EC to stop this acquisition outright and put an end to UMG's "juggernaut" strategy. This is essential to ensure an open, inclusive and competitive music market in Europe which is needed to ensure a broad range of participants and a diversity of music.  Music fans, artists, and future entrepreneurs all need this."