Independent record labels and publishers are in a fierce battle as they urge regulators to block Universal Music Group (UMG) from acquiring Downtown Music Holdings. The deal, which was announced on Monday (Dec. 16), has raised concerns about weakened competition and its detrimental impact on artists and fans. UMG-owned Virgin Music Group's $775 million cash purchase of Downtown Music Holdings brings a significant number of independent businesses under its control, including CD Baby, FUGA, Songtrust, and AdRev. This acquisition follows UMG's acquisition of full ownership of European indie label group [PIAS] two months ago, prompting indie trade groups to call for regulatory intervention.

Industry Voices of Concern

Helen Smith, executive chair of independent labels trade body IMPALA, which represents over 6,000 indie labels and music companies in Europe, including Beggars Group, Cooking Vinyl, Domino, and Epitaph, described the deal as another "land grab." She emphasized the need for competition authorities in key jurisdictions to conduct thorough investigations and block these deals. Smith also called on the European Union's executive branch, the European Commission, to set the standard internationally. Beggars Group founder Martin Mills added that the "cynical use of the Virgin brand" hides the fact that this is about "utter dominance and control." He continued, "This is another step on the road of UMG's pretence to be the independents' fairy godmother, but there's a wolf under that cape."The acquisition of [PIAS] and Downtown in rapid succession by UMG comes after a flurry of dealmaking in the past several years. Major label acquisitions during this time include Sony Music's 2022 purchase of artist services company AWAL and Kobalt Neighbouring Rights from Kobalt Music Group. Sony also acquired Spanish label and distributor Altafonte and Greek indie label Cobalt Music last month. Meanwhile, Warner Music Group has been steadily growing its recorded music interests in Central and Eastern Europe by buying minority stakes in Croatia's Dancing Bear Music, Slovenian independent label NIKA, and Serbia's Mascom, and acquiring Dutch label Cloud 9 Recordings.UMG's deals for [PIAS] and Downtown followed a decade-long ban on the music giant acquiring certain music companies or catalogs in Europe that expired in September 2022. These restrictions, imposed by the European Commission in 2012 after UMG's $1.9 billion takeover of EMI, prevented UMG from re-acquiring its sold assets or re-signing artists from divested labels for 10 years.Although Downtown Music Holdings is based in New York, its multifaceted business, representing over 50 million songs across more than 145 countries and spanning publishing, distribution, artist and label services, and royalty administration, makes it a major player in the global indie sector. IMPALA chair Dario Draštata warned that the company's acquisition by UMG would create a "fundamental shift in the competitive dynamics of the music market."The Brussels-based trade association said the sale of Downtown and [PIAS] would further squeeze independents in an already highly concentrated market and help UMG move further into the market for distribution and services for labels and artists. IMPALA stated that this means more market share and gives UMG control over the opposition. It added that UMG suing Believe is another part of the strategy, referring to last month's $500 million lawsuit filed by UMG, ABKCO, and Concord Music Group against Believe and its distribution company TuneCore for "massive ongoing infringements" of their sound recordings.Other executives and organizations voicing concern over UMG's latest acquisition include global independent music publishers trade body IMPF, which said the potential sale would "ultimately reduce choice for songwriters and publishers alike." The U.K. Association of Independent Music (AIM), whose CEO Gee Davy said the deal reduces independent routes to market, emphasized the importance of upholding a true choice of partners for artists and labels and ensuring balanced negotiating power.Representatives for UMG did not respond to requests for comment when contacted by Billboard.