European Union anti-trust regulators have reportedly told Universal Music Group it must make multiple, major concessions in its plan to acquire EMI's recorded music division, if it wants the EU's approval. According to Reuters' sources, the EU regulators told UMG that its plan as it current stands would significantly impede competition in the music industry. Unless concessions are made, the EU could veto the deal.

Sources told Reuters that the EU expressed strong concerns over the UMG-EMI deal, saying it was incompatible with the internal music market in Europe and would completely change the supply and demand of the music business. The Commission also reportedly rejected Universal's arguments that piracy and digital retailers would limit the larger UMG's power.

Universal could offer to sell off some of its catalogs or offer improved licensing deals to its competitors as concessions to the EU regulators.

The label said in a statement that it will soon release a response "which will address the concerns outlined in this procedural document," adding that "We will continue to work closely with the Commission and look forward to securing regulatory clearance." According to the Financial Times, UMG is expected to respond to the EU regulators within days.

Yesterday it was reported that UMG CEO Lucian Grainge had sent a memo to staffers assuring them that Vivendi and its Chairman Jean-René Fourtou are still committed to the UMG-EMI deal, following last week's exit of Vivendi CEO Jean-Bernard Lévy.