Indie Execs Urge ‘Phase Two’ Probe Into UMG’s Downtown Deal

North of 200 indie execs are urging the European Commission to launch an in-depth “phase two” investigation into Universal Music’s proposed Downtown buyout.

That entreaty represents the latest in a line of public pushback against the $775 million transaction, which the Commission has been reviewing since April. The same EU executive arm has until July 22nd to approve the controversial acquisition – or, alternatively, move forward with the second investigation phase.

As its name suggests, said second phase would span months and bring heightened scrutiny for the sought deal, which has drawn indie-sector opposition from the get-go. Now, two weeks and change out from the approve-or-flag deadline, opposition is once again ramping up.

Addressed specifically to European Commission EVP Teresa Ribera, the initially highlighted letter criticizes Universal Music’s Downtown purchase as “a serious risk” to music-sector competition in Europe and beyond.

“The deal would place a significant chunk of essential infrastructure under the control of the market leader,” the text spells out. “Many independent music businesses are already tied to Downtown’s services, meaning that we would have to rely on our biggest competitor to connect our artists and their music to their fans.

“That’s why it’s critical that the deal is reviewed through the lens of its ‘control share’ over the digital markets economy, as well as the physical market, not just share by revenue,” the letter proceeds.

Also at issue is the post-buyout access Universal Music would have to “data from rivals using its services.”

“This data is far reaching, from distribution information – including artists and song trends, and performance on digital platforms – all the way through to critical business information such as pricing, contractual terms and strategic relationships,” the letter maintains here. “Being able to access all of this data would give UMG backdoor access to other competing businesses in the market and strengthen its already advantageous position even further.”

Regarding signers, among the many individuals behind the letter are A2IM head Richard James Burgess, Australian Independent Record Labels Association CEO Maria Amato, AIM’s Gee Davy, Beggars Group CEO Paul Redding, Cooking Vinyl chairman Martin Goldschmidt, Exceleration Music partner Charles Caldas, IMPALA CEO Helen Smith, and Worldwide Independent Network CEO Noemí Planas, to name just some.

With that, all eyes are now on the European Commission’s decision, which, as noted, we should know by Tuesday the 22nd. Of course, it’s important to avoid jumping to conclusions before then.

At the same time, we shouldn’t overlook which way the wind is apparently blowing; it’s safe to say the transaction’s considerable criticism isn’t reducing the odds of a phase-two investigation. Worth reiterating as well is that the Commission doesn’t seem thrilled about the acquisition, which it previously claimed “threatens to significantly affect competition.”