European Commission approves UMG’s $775m Downtown Music acquisition

The approval is conditional on UMG divesting Downtown’s Curve royalty accounting business, which will be required to operate as a standalone entity until it is sold to an independent buyer approved by the Commission.

The decision, announced on 5 June, follows an in-depth investigation launched after UMG’s Virgin Music Group initially disclosed the transaction in December 2024. The Commission formally opened its Phase II review in July 2025, citing concerns over competition in the music distribution market within the European Economic Area.

Under the agreed remedies, UMG must sell Curve Royalty Systems in full, including its platform, customer contracts and most staff, with limited exceptions. Regulators said the measure was intended to address concerns that ownership of the system could give a major label access to commercially sensitive data from competitors.

European Commissioner for Economy and Productivity Valdis Dombrovskis, said the decision was aimed at maintaining competition in the sector.

“The music industry plays an important role in bringing artists’ creations to audiences, and it is essential to uphold the availability of diverse service providers for consumers,” he said.

“Our in-depth investigation confirmed that a large number of companies will continue to offer their distribution services to European music labels and artists,” he added.

He said the divestment requirement was necessary to prevent potential misuse of sensitive data and to preserve fair competition in the market.

UMG said the acquisition would strengthen its services for independent artists and labels. Nat Pastor and JT Myers, co-chief executives of Virgin Music Group, said the combination would expand support for independent clients.

“Bringing Downtown’s exceptional team and capabilities to Virgin Music Group means greater flexibility and a sharper set of services for independent entrepreneurs, artists and labels,” they said.

They added that the deal would help create a more competitive ecosystem for independent music businesses, combining complementary services and resources.

Downtown Music Holdings chief executive Pieter van Rijn said the transaction would expand opportunities for independent artists and labels globally.

By joining forces with Virgin Music Group, we’re helping build a more diverse, dynamic and opportunity-rich environment, one that amplifies independence and expands the cultural impact of the extraordinary partners we serve,” he said.

Downtown Music Holdings operates a portfolio of music services, including distribution and publishing platforms such as CD Baby, Songtrust and FUGA. The company serves more than 5 000 business clients and over four million creators across 145 countries.

Following the approval, Curve Royalty Systems will remain operational as a separate business until its divestment is completed.

The deal faced significant scrutiny from independent music organisations and industry stakeholders. Groups including IMPALA, which represents independent labels in Europe, had urged regulators to block the transaction, arguing that behavioural remedies would not adequately address competition concerns.

The Commission said its investigation also examined whether the merger could reduce competition in wholesale music distribution services, but concluded that the divestment commitments were sufficient to allow the deal to proceed.