Universal Music Group Offers Save for European Commission’s Block of Downtown Acquisition

Universal Music Group has proposed a solution to address the European Commission’s objections regarding its $775 million acquisition of Downtown Music Holdings, offering to divest a key subsidiary to secure regulatory approval.

The major label’s response centres on selling off Curve, Downtown’s royalty and rights management platform, while retaining a “sanitised” duplicate version stripped of client data. Under the proposal, UMG would implement non-disclosure agreements for any personnel transitioning from Curve to UMG or Interscope operations.

The European Commission raised concerns in November following an investigation into whether the merger could “reduce competition” within the music industry. Regulators expressed particular concern that UMG might gain access to commercially sensitive data stored on Downtown’s Curve platform, thereby hampering rival labels’ competitive capabilities.

Curve currently partners with over 500 labels, publishers, and rights holders globally, making its data repository a significant concern for competition authorities. The Commission’s objections also referenced Downtown’s distribution service FUGA, though to a lesser extent than Curve.

The independent music sector has mounted substantial opposition to the deal. The Independent Music Companies Association (IMPALA) released a statement arguing that Curve’s data overlaps significantly with other Downtown subsidiaries, including the distribution platform CD Baby and the publishing management service Songtrust, neither of which was featured in the EC’s formal objections.

“The competition issues must be viewed in the wider context of multiple concerns around the digital market, the whole ecosystem, cultural diversity and the removal of a significant competitor,” IMPALA stated in a Monday press release.

A coalition campaign dubbed “100 Voices” has called for the acquisition to be blocked entirely, claiming it would enable UMG to “increase its bargaining power and enhance its control over key parts of the supply chain of music.”

Downtown Music Holdings was founded in 2007 by Justin Kalifowitz, a former executive at Virgin Records and Spirit Music Publishing. The company gained prominence when Spirit Music Publishing transferred its administration to Downtown in January 2024. UMG relaunched Virgin as Virgin Music Group in 2022, and in December 2024, it announced the Downtown acquisition.

The timing of UMG’s proposed remedy comes as the industry watches closely for regulatory precedents regarding major label consolidation. Austria and the Netherlands initially requested the European Commission’s assessment of the proposed acquisition in April. The European Commission has set a deadline of February 6, 2026 for its final decision on whether to approve the merger with UMG’s proposed conditions or to block the deal entirely.