The European Commission has granted conditional approval for Universal Music Group’s acquisition of Downtown Music Holdings following an in-depth investigation.
Approval requires the complete divestment of Curve, a Downtown data analytics unit that handles commercially sensitive information from rival labels.
The Commission concluded that UMG’s access to Curve would have impeded effective competition in the wholesale distribution market for recorded music. Investigators determined that Curve’s data would hamper rival labels’ ability and incentive to compete with UMG.
Conversely, the Commission found that information processed by other Downtown products was not commercially sensitive. Data stored on those platforms was either publicly available or did not concern the commercial terms of UMG’s competitors.
To address competition concerns, UMG and Downtown submitted a remedy package that was subsequently improved following a market test. The final package requires the full divestment of Curve, including:
All of Curve’s customers and their data, as well as Curve’s supply contracts. All of Curve’s personnel. Curve’s platform, including source code, data, algorithms, and IT hardware used exclusively by the unit.
The purchaser will grant the merged entity a transitional license enabling use of Curve software for limited internal purposes only. That license will not include any data from Curve’s customers.
EU Commission stated that these commitments fully address the identified competition concerns by preventing UMG from obtaining access to commercially sensitive data of its rivals stored on Curve.
On this basis, the Commission concluded the transaction as modified by the commitments would no longer raise competition concerns.
The decision is conditional upon full compliance with the commitments. An independent trustee under Commission supervision will monitor implementation.
EU will approve a suitable purchaser for Curve in a separate procedure.
