AI Deals & Market Power: The Legal Scrutiny Facing Universal Music

Hi there,

This week’s update focuses on the escalating legal and regulatory scrutiny around major music companies as they navigate the AI frontier.

In Europe, the International Artists Organisation (IAO) has formally called on the European Commission to block Universal Music’s acquisition of Downtown Music. In a letter to regulators, IAO President Nacho García Vega argued that the deal must be viewed in the context of Universal’s new AI licensing agreements, like its recent settlement with Udio. He warns that combining Universal’s existing market dominance with Downtown’s vast network of services would create an “imbalance of power” that could negatively shape the evolving AI market to the detriment of artists.

Across the Atlantic, a coalition of North American songwriter groups (MCNA) is sounding a different but related alarm. They have issued a stark demand for full transparency and explicit creator consent in all AI licensing deals, directly referencing Universal's Udio settlement. The coalition expressed deep apprehension about endorsements of the deal while its terms remain secret, citing a history of “oral assurances by multi-national music conglomerates that turned out not to be wholly accurate.”

Artists Group Urges EU to Block Universal-Downtown Deal Over AI Concerns

The International Artists Organisation has intervened in the European Commission’s antitrust review of Universal Music’s proposed acquisition of Downtown Music. In a letter, IAO President Nacho García Vega stressed that regulators must consider Universal’s new AI licensing deals, like its settlement with Udio, when assessing the merger's impact. He argued that the combined entity’s control over vast data and market share would allow it to unduly influence the development of AI business models. Vega cited existing concerns over how Universal's power has shaped streaming, such as the implementation of payment thresholds, and fears that a larger Universal would extend this control into the AI domain, calling the deal “a giant step back for artistkind.”

Songwriter Coalitions Demand Transparency in AI Deals, Question Udio Settlement

Music Creators North America (MCNA) has joined a growing chorus of creator groups demanding that labels and publishers commit to transparency and creator consent in AI licensing agreements. The coalition voiced strong concern about the recent settlement between Universal Music and Udio, warning against endorsing the deal while its terms are undisclosed. MCNA stated it is “unable to accept assurances concerning the efficacy of the alleged opt-in consent provisions until seeing the entirety of the deal in writing,” alluding to a trust deficit with major music companies. The group is calling for the immediate development of industry standards for deal disclosure and a uniform system of “consent and fair compensation” for creators in all AI contexts.

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