Universal's $775 million Downtown deal may hinder competition, EU regulators warn
Virgin announced the deal, opens new tab in December last year which subsequently generated pushback from a wide swathe of European independent labels.
The European Commission set out its concerns on Tuesday as it opened an in-depth investigation into the deal, confirming a Reuters story last week.
"After the acquisition, UMG would likely have the ability and incentive to use commercially sensitive data of third-party record labels for its own business activities notably related to recorded music," the EU executive said in a statement.
It said UMG's access to such data may harm rival record labels and may ultimately further strengthen UMG, already a leader in the market for the wholesale distribution of recorded music in Europe.
The Commission set a Nov. 26 deadline for its decision.
Universal is the world's biggest music company, while Downtown owns a major music publisher and a number of other businesses that help musicians collect royalties.
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