Photo Credit: Universal Music Group
A new report is shedding light on the “robust remedy” submitted to the European Commission by Universal Music Group (UMG), which could be willing to divest Curve Royalty Systems to get the nearly $800 million Downtown deal over the finish line.
That interesting detail surfaced in a brief MLex update today, just days after UMG confirmed the mentioned remedy – albeit without publicly disclosing the proposal’s specifics. Despite the major’s silence here, as we noted last week, the European Commission itself had already provided a far-from-subtle hint about the outstanding competition worries.
To be sure, when summarizing its “statement of objections” in late November, the Commission only highlighted UMG’s potential “ability and incentive to gain access to commercially sensitive data that is stored and processed by Downtown’s Curve.”
And as we noted, this didn’t appear an insurmountable hurdle for Universal Music; among other things, Curve is a relatively recent addition to the Downtown Music Holdings portfolio.
Consequently, along with another important component of UMG’s remedy statement – that the business had moved to address the Commission’s “only remaining concern”– the reported willingness to part with Curve could suggest that the deal might be progressing towards approval.
Per MLex, UMG in its proposal simply raised the possibility of selling the royalty processor. The Commission, in turn, reportedly circulated the offer “to other market participants” for “feedback on whether it goes far enough.”
Also worth reiterating are the indie community’s reportedly varied positions on the transaction, which, though the subject of pushback from IMPALA and more, has apparently elicited support from some.
Differing indie-space views aside, IMPALA still believes that the Commission should block the purchase outright. Ahead of a scheduled February 27th final decision – newly delayed from closer to February’s start – the organization doubled down on its stance in a release.
Therein, Helen Smith, IMPALA’s executive chair, called on “the Commission to apply logic in its assessment of both its findings and any proposed remedies and extend where required.”
“We are continuing our discussions with the European Commission as an interested third party to ensure that we reach a sound conclusion in the interests of the whole market and which stands up to scrutiny,” Smith continued.
Meanwhile, IMPALA chair and Dallas Records executive director Dario Draštata stressed that “the concerns go beyond Curve to cover data on other services and also harm in different parts of one interconnected market.”
And Francesca Trainini, president of IMPALA and VP of Italy’s PMI, emphasized the belief that the “best solution is blocking the whole deal outright.”
