LONDON – Independent labels commerce physique IMPALA is looking on regulators to analyze Universal Music Group’s acquisition of [PIAS] over considerations that the deal restricts competitors within the international file enterprise and “narrows options for artists and labels.” 

[PIAS] co-founders Kenny Gates and Michel Lambot introduced earlier this week that they have been promoting their remaining shares within the indie label group to Universal Music Group (UMG), which already owns a 49% stake within the firm, for an undisclosed sum.

The deal provides UMG full possession of [PIAS]’s companies division [Integral], which gives bodily and digital distribution companies to greater than 100 indie label companions together with ATO, Beggars Group and Secretly Group and can henceforth merge with Virgin Music Group.

Also falling below UMG’s management due to the share sale is the [PIAS] Label Group, residence to indie imprints Play It Again Sam, harmonia mundi, Spinefarm, Source and associate labels equivalent to ATO, Heavenly, Mute and Transgressive. Despite the change in possession, [PIAS] says its label group enterprise will stay fully autonomous.

In response, IMPALA and several other of its affiliate nationwide commerce teams are calling on competitors regulators to launch an investigation into what it described as “unchecked concentration in the music market [which] continues to be a serious problem.”

“The bottom line is UMG’s acquisition of [PIAS] will increase the power of [UMG] across Europe and beyond, including the U.K. and the USA, and IMPALA expects regulators in these jurisdictions to take action,” stated the Brussels-based group, which represents over 6,000 indie music corporations in Europe, in a press launch on Friday (Oct. 18). 

Helen Smith, IMPALA’s government chair, stated she “expects” regulators to overview the [PIAS] acquisition “and answer the question the industry is asking about how it is possible for UMG to gain more market share after it was already considered too big?”

“A share deal is one thing, this is something else,” stated Smith, who is looking for competitors officers to evaluate how the deal impacts bodily and digital music markets, together with distribution companies, “as well as the impact on competitors, digital services, artists and fans.” 

Geert de Blaere, the chair of Belgian affiliation BIMA, stated that whereas the Belgian market owes a debt of gratitude to [PIAS] for exhibiting entrepreneurs what is feasible, the impression of the corporate’s takeover by UMG “will be structural, significant and long lasting” for the impartial music enterprise. 

“This is completely different to a share deal as UMG takes over the market share of [PIAS]. Scale and stability in the whole independent sector will be lost. Incremental shifts in the market across the majors leverages disproportionate influence in the hands of a few companies. Each time that happens the result is more control over how the market develops,” stated de Blaere in an announcement.

Supporting calls for an investigation, IMPALA chair Dario Draštata stated the deal strengthens UMG by way of market share, “eliminates a principal competitor” and “narrows options for artists and labels.”

Representatives for UMG and [PIAS] didn’t reply to requests for remark when contacted by Billboard.

The acquisition of [PIAS] by the world’s largest music firm additional grows the dominant market share loved by UMG and follows the expiration of a 10-year ban on the music big buying sure music corporations or catalogs in Europe.

Those restrictions have been positioned on UMG in 2012 by the European Commission as one of many situations of the corporate’s $1.9 billion takeover of EMI going forward. As a part of that course of, the European Union’s government department compelled UMG to divest the Parlophone Label Group, which was purchased by Warner Music Group (WMG) for round $750 million, in addition to the offloading of quite a few EMI entities in Europe, and the Chrysalis, Mute, Sanctuary and Co-op Music labels.

To obtain regulatory approval to purchase EMI, UMG dedicated to not re-acquire any of the property offered, or re-sign any artists signed with labels it had divested for a interval of 10 years. Just a couple of months after that decade-long ban expired in September 2022, Universal acquired a 49% minority stake in [PIAS], which owns a few of these beforehand off-limits catalogs, together with Co-op Music.

On Tuesday (Oct. 15), UMG introduced it had grown its minority curiosity to full possession, following Gates and Lambot’s choice to promote their controlling stake.  

The acquisition of [PIAS] by UMG is a part of a rising pattern of main labels trying to the impartial sector to extend their market share, both by enhancing their distribution choices for indie artists and labels or by investing in, or shopping for, impartial music corporations.

In 2019, UMG acquired impartial distribution and advertising and marketing firm Ingrooves Music Group. One 12 months later, Sony Music purchased J. Erving‘s digital distribution and label companies firm Human Re Sources from Q&A, adopted in 2021 by its buy of artist companies firm AWAL and Kobalt Neighbouring Rights from Kobalt Music Group.

Major indie label acquisitions over the previous decade embody WMG shopping for Netherlands-based Spinnin’ Records in 2017 and Sony Music’s buy of U.Ok. dance label Ministry of Sound in 2016.

On a smaller scale, WMG has been steadily rising its recorded music pursuits in Central and Eastern Europe, shopping for minority stakes in Croatia’s Dancing Bear Music, Slovenian impartial label NIKA and Serbia’s Mascom. And this week, WMG Benelux introduced the acquisition of Dutch label Cloud 9 Recordings.

Referencing the main labels’ pursuit of key impartial labels, Draštata, who can also be president of Balkan indie label commerce affiliation RUNDA, stated the apply was changing into an “issue across Europe.”

“The loss of such big players for the independent sector compounds the competitive impact and the risk is that this trend will continue,” stated Draštata in an announcement. “We have been signalling the problem of creeping dominance for many years and it’s time for a new competition approach to address this question.”