Universal has committed to banishing Most Favoured Nation clauses from contracts with digital music companies in Europe for the next ten years.
The agreement with EC regulators was a integral tenet of the deal which saw UMG's £1.2bn takeover of EMI approved earlier today.
Critics of the deal, including Beggars boss Martin Mills, have suggested that Universal/EMI's combined market power will lead to unjustly favourable deals with digital companies in future - and an unfair edge in negotiations.
The MFN clause would oblige digital customers to extend any favourable term granted to Universal's competitors to Universal itself.
"Most-Favoured Nation clauses provide that if a digital customer negotiates an attractive licensing deal with Universal's competitors, this customer needs to offer the same terms to Universal," an EC spokesperson told Music Week.
"The effect of these clauses is two-fold. First, the licensing cost of this customer increases as it needs to offer the favourable conditions to both, Universal and its competitor. Second, Universal's competitors may be constrained in their negotiations with digital customers, as these negotiations take place under the threat that customers need to extend any favourable treatment, agreed between the customer and Universal's competitor, also to Universal.
"Universal now committed not to enter into any agreement with any digital customer in the EEA that contains MFN clauses. This includes new agreements that Universal negotiates with digital customers and the re-negotiation or renewal of existing agreements. This commitment should assist digital customers in preventing increases in their licensing cost. It also assists competitors in competing effectively with Universal, as they will no longer negotiate with digital customers under the constraints of Universal's MFN clause."
To see a full list of what Universal will keep and what they must divest, click through here.
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