The EU executive on Monday said it feared Universal Music Group’s $775-million acquisition of global music services company Downtown could restrict competition.

The European Commission launched an investigation into the deal in July this year after independent music companies warned it would allow UMG to substantially increase its industry dominance.

Headquartered in the Netherlands, UMG is the world’s biggest music company and is home to the likes of Taylor Swift, Billie Eilish, and Kendrick Lamar.

US-based Downtown Music provides services to independent record labels and musicians, including managing copyright issues and helping artists collect royalties.

The EU commission, which is the bloc’s top competition authority, said it had sent a warning known as a “statement of objections”, a formal step in antitrust probes.

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“The commission is concerned that UMG may have the ability and incentive to gain access to commercially sensitive data that is stored and processed by Downtown’s Curve,” it said in a statement.

The EU executive said it was concerned “that such information advantage for UMG would hamper rival labels’ ability and incentive to compete with UMG.”

The formal warning does not prejudge the outcome of the investigation.

The EU regulator must make a final decision by February 6 next year.

The commission has the power to block a merger if it finds that an acquisition would threaten competition in the European Economic Area.

AFP