Apple’s purchase of Shazam is now under investigation by the EU
The EU has launched an investigation into Apple’s
acquisition of music identification service Shazam. It’s concerned that
the deal could shrink consumer options for mobile music streaming
services within the EEA (European Economic Area).
In February, multiple countries, including Austria, France, Iceland, and Spain, requested that the European Commission assess the acquisition to determine whether it’s allowed
under a European Union merger law. The deal, according to the
commission, “may have a significant adverse effect on competition in the
European Economic Area.” That request is now being acted on, with an
investigation deadline set of September 4th.
The primary worry appears to be that Spotify and Apple
currently gain 1 million clicks per day through the Shazam app. While
Shazam is still live, if Apple were to shut it down or only direct
referrals to its own music service, Spotify could lose a significant
amount of traffic. Additionally, officials point out that Apple could
use Shazam’s data to unfairly target its rivals’ users and “encourage
them to switch to Apple Music.”
EU competition commissioner Margrethe Vestager said in a statement:
“The way people listen to music has changed significantly in recent
years, with more and more Europeans using music streaming services. Our
investigation aims to ensure that music fans will continue to enjoy
attractive music streaming offers and won’t face less choice as a result
of this proposed merger.”
Apple confirmed it was buying Shazam
in a deal worth $400 million last December. That number is far from the
$1 billion Shazam was valued at during its last funding round, but the
company was struggling with profitability, only bringing in $54 million
in revenue during 2016. Shazam can be a boon to Apple in several ways.
Its music and sound recognition is already integrated with Siri, and it
could gain a deeper integration with iOS. Apple could also leverage
Shazam’s visual recognition tech for its ARKit efforts
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