Virgin Music Group Completes $775 Million Downtown Acquisition

The media first reported on Virgin Music Group’s (VMG) plans to acquire Downtown in December 2024, with Downtown Founder Justin Kalifowitz expressing excitement about the company joining Virgin’s roster of record labels and, by extension, becoming part of Universal Music Group (UMG).

By then, however, many associations and industry insiders – particularly those in the independent sector – had voiced concerns over the transaction. Downtown, originally an independent rights management and music services company, had handled a “significant portion of the independent sector's delivery to digital services.”

Naturally, the acquisition means that Downtown is no longer independently owned, giving VMG, and consequently UMG, access to distribution infrastructure and additional services originally intended for artists and labels operating outside the major label system. Many argue – and argued back then – that this provides UMG with a tangible opportunity – perhaps larger than ever before – to truly step into and extend its influence into a landscape long dedicated solely to independent and DIY music.

Among Downtown’s divisions are Downtown Music Publishing, the music distribution company CD Baby, the music rights management software platform Songtrust, the B2B tech and music service company FUGA, and several other subsidiaries operating across distribution, publishing, and royalty administration. Together, these assets represent a substantial share of the infrastructure supporting independent creators and labels.

The European Independent Music Companies Association (IMPALA), in particular, has been very vocal against the acquisition, even calling the agreement “another land grab” by UMG. The association also urged the European Commission (EC) to first “establish a clear agenda on concentration in the music market” and then to block the proposed transaction.

In June 2025, the Dutch Competition Authority (later joined by Austria) formally requested the EC to conduct a thorough investigation of the deal due to concerns about its impact on competition in the music services market. The Commission launched an in-depth review in July that year – a rare “Phase II” investigation, reserved for cases that raise serious competition concerns.

In November 2025, the EC issued a formal Statement of Objections, informing UMG of its preliminary view that the deal, as initially proposed, could limit competition in the wholesale distribution of recorded music by providing the major label with commercially sensitive data from rival record labels.

As is standard in EU merger proceedings, the Statements of Objections didn’t prejudge the final outcome of the investigation. Instead, UMG was given the opportunity to respond to the Commission's Statement, review the case file, and request an oral hearing before a decision was reached.

Finally, on February 13, 2026, the EC approved the $775 million acquisition but only on the condition of a full divestment of Downtown's royalty accounting platform, Curve Royalty Systems, Ltd (Curve). As the Commission reasoned, selling Curve would prevent UMG from gaining access to the proprietary royalty and contractual data of independent competitors who use that platform.

While welcoming the EC's decision to take on the case, conduct a detailed merger investigation, and order the divestment of Curve, IMPALA has warned that the outcome “demonstrates the clear risks of excessive expansionist policies.” The association has emphasized that while large companies provide benefits to all markets and businesses, “there comes a point where big is too big, and we need to make sure truly independent routes to market can compete.”

IMPALA also indicated that it would scrutinize the decision further and consider whether an appeal or other actions may be necessary.