Photo Credit: Downtown Music Holdings
European music trade association IMPALA is flashing warning signs about the proposed UMG acquisition of Downtown Music through its Virgin Music Group subsidiary.
UMG announced back in December 2024 that it had entered into a definitive agreement to acquire Downtown music Holdings LLC for cash consideration of $775 million—subject to regulatory approval. The deal is expected to close in the second half of 2025, but not everyone was happy with the news. Impala warns that further consolidation of the market expands UMG’s market power while hurting indie artists.
“A thriving music market needs effective competition and plenty of routes to market for labels and artists,” says Helen Smith, Impala’s Executive Chair. “UMG is planning the exact opposite because they want to control access to the market. The two other music majors, Sony and Warner, are also buying up music businesses in key markets. With far fewer options, many labels and artists are going to be shut out.”
European independent labels are calling on competition authorities in all key jurisdictions to stop UMG’s strategy of buyouts and acquisitions. “All markets need big companies, but the music market is experience a level of concentration that would not be tolerated in any other market,” adds Dario Draštata, Chair of Impala, President of Regional Association RUNDA. “Independent labels and artists should not depend on their competitors for access. We also look to regulators to see through the ‘indie washing’ and take action.”
Impala has more than 6,000 members across 33 territories in Europe and the UK, including prominent independent labels in all key countries. It is calling on regulators to block the planned acquisition. The association points out that the EU has already acted to limit UMG’s market power. Now it is sending regulators in key jurisdictions detailed analyses of the potential damage caused by the acquisition.
The analysis includes almost total control of access routes to the market and far fewer options for labels and artists to distribute their music and access other essential services. Impala has asked regulators to carry out detailed investigations into the potential harm to competition from serial acquisitions like these. Downtown owns FUGA, a full-service B2B music distributor and CD Baby, a digital distribution service favored by independent artists.
“We are explaining the role of independents and their artists and why access-to-market routes must not be owned by their biggest competitors,” adds Francesca Trainini, Impala President & Vice President of Italian association PMI comments. “Regulators need to look at relevant market share and control share data in all affected areas of the business, including distribution, publishing, royalty accounting, and digital services.”
Impala says UMG’s claims that the businesses it is buying are still independent is ‘misleading.’ “This is misleading and unfair competition, and amounts to ‘passing off,’” Helen Smith continues. Passing off is the practice of making misleading claims to customers, which is against basic competition principles in most parts of the world.
Content shared from www.digitalmusicnews.com.