Universal Music Downtown Deal to Receive ‘Formal’ EU Warning

The European Commission is reportedly preparing to hand down a “formal warning” about Universal Music’s proposed $775 million Downtown buyout – albeit without blocking the deal outright.

That reportedly imminent development surfaced in a recent Bloomberg piece. Additionally, IMPALA, which has from the get-go opposed the play on competition and market-concentration grounds, reached out with a statement about this latest twist.

Beginning with the report, “people familiar with the matter” are said to have pointed to a forthcoming “statement of objections.” In short, the latter would compel the involved parties to remedy (or successfully challenge) certain competition concerns before the transaction could wrap.

But as mentioned, it doesn’t appear as though the statement would end up blocking the long-in-review purchase altogether; “most merging companies” are said to consummate deals after addressing the identified issues.

Furthermore, one needn’t expend too much energy to infer the positioning of the cited “people familiar with the matter.”

Consequently, it might be telling that Bloomberg expressly noted the deal’s perceived potential to afford UMG access to rivals’ commercially sensitive data and compromise indies’ artist-services capabilities.

In any event, all eyes are on the upcoming statement of objections, which wasn’t live in the appropriate docket at the time of writing.

As highlighted above, however, the statement will probably be “issued imminently,” per the presumably well-placed sources. Meanwhile, the Commission has until February 6th to provide its final decision on the UMG-Downtown deal.

Closer to the present, a Universal Music rep described the acquisition as “about offering independent music entrepreneurs access to world-class tools,” besides emphasizing the belief that the buyout “will ultimately be cleared.”

And IMPALA, for its part, is looking forward to obtaining “official confirmation and details of the objections.”

“We welcome this news and look forward to official confirmation and details of the objections,” the organization said. “We will continue to liaise with the European Commission regarding our members’ concerns.”

Not stopping there, IMPALA also reiterated its opposition (the “acquisition should be blocked outright”) and its related initiatives – among them the 100 Voices campaign, a cultural diversity paper, and a number of op-eds.

Despite this extensive pushback – as its name suggests, the 100 Voices campaign consists of UMG-Downtown criticism from over 100 industry professionals and companies – the indie community isn’t uniformly opposed to the purchase.

Earlier this month, AIM chair Ruth Barlow acknowledged the varying viewpoints surrounding the deal, and apparently, some of the corresponding discussions “have drifted beyond healthy debate.”