Exclusive-Universal's $775 million Downtown bid faces EU antitrust investigation, sources say

By Foo Yun Chee

BRUSSELS (Reuters) -Universal Music Group unit Virgin Music Group's $775 million acquisition of Downtown Music faces a full-scale EU antitrust investigation on concerns about its impact on competition, three people with direct knowledge of the matter said.

Virgin Music announced the deal last December, triggering criticism from a wide swathe of European independent labels.

Virgin had until Tuesday to offer remedies to address regulatory worries during the deal's review but did not provide them, according to an update on the European Commission website.

The Commission, which acts as the EU competition enforcer, declined to comment. Its preliminary review of the deal ends on July 22. It will kick off its full-scale, four-month investigation following that, the people, who asked to remain anonymous due to the sensitivity of the matter, said.

A Virgin Music spokesperson declined to comment on the potential antitrust investigation, saying that the Commission has not announced a decision.

The company will continue to work constructively with the Commission and "address the wilful misrepresentation of market data by self-interested parties who represent a tiny fraction of the thousands of independent labels that make up the broader independent community globally", the spokesperson said.

He said the initial projected timeframe of the second half of 2025 to close the deal remains unchanged.

Universal is the world's biggest music company, while Downtown owns a major music publisher and a number of other businesses that help musicians collect royalties.

European independent music label group Impala, the European Composer and Songwriter Alliance (ECSA) and the Worldwide Independent Network have urged the EU antitrust watchdog to examine the deal and to even block it if necessary.

They said the acquisition would further entrench Universal's position across European music markets and strengthen its control over market access for independent labels.

(Reporting by Foo Yun CheeEditing by Tomasz Janowski and Sharon Singleton)