On Friday 13 February, the European Commission conditionally authorised the acquisition by Universal Music Group (‘UMG’) of Downtown Music Holdings (‘Downtown’) following an in-depth investigation launched last summer.
The deal, valued at $775 million (around €650 million), was agreed after both parties committed to sell the entire Curve Royalty Systems accounting platform, owned by Downtown.
The Commission had warned in November that this transaction risked undermining competition in the music industry, by giving UMG access to sensitive data from rival record companies (see EUROPE 13758/14).
In response to these concerns, UMG and Downtown offered comprehensive commitments to divest Curve in its entirety, including its staff, platform software, customer base and all data.
According to the Commission, these commitments “fully address the competition concerns, as they prevent UMG from obtaining access to the commercially sensitive data of its rivals stored on Curve”.
On a daily basis, Downtown manages important commercial data concerning the activities of the main record companies, including Universal’s major competitors.
UMG, headquartered in the Netherlands, is the world’s leading music publisher.
The Commission’s market investigation confirmed that there are several viable competitors, such as Sony Music Entertainment and Warner, and many other independent providers of artist and label services.
The investigation also confirmed that it was possible to switch from one of these service providers to another, and that this change was neither costly nor time-consuming. (Original version in French by Lionel Changeur)