EU Investigates Apple's Shazam Acquisition Based on Customer Data, Harm to Competition

EU Investigates Apple's Shazam Acquisition Based on Customer Data, Harm to Competition

Apple's acquisition of music recognition service Shazam, a deal reportedly worth $400 million, could be at risk after European Union antitrust regulators announced Monday that they've opened a probe into the deal.

"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", European Commission antitrust chief Margrethe Vestager said of the probe.

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The Shazam app uses the microphone on a smartphone or computer to identify nearly any song playing nearby, then points users to places they can listen to it, such as Apple Music or Spotify Ltd.

Several countries called for an assessment under the EU Merger Regulation, including Austria, France, Iceland, Italy, Norway, Spain, and Sweden. Although, the purchase price was not revealed at that time, it was reported that the deals costs around $400 million. Shazam also works with television shows and ads and could have a variety of other functions in Apple's broader line of services.

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Apple didn't immediately reply to a request for comment about whether it would do any of those things. Additionally, the authorities want to find out if Apple Music competitors would be harmed if Shazam stopped referring customers to them after the acquisition.

It's unclear what the worry is here, as Apple doesn't dominate digital music anymore and music identification capabilities are fairly common. The commission noted that it has until September 4 to make a decision regarding Apple's proposed acquisition, which should give it plenty of time to scrutinize the company's plans. Analysts say it is poised to overtake Spotify as the market leader in the USA within a year. Shazam has also been experimenting with augmented reality (AR). Right now that includes Apple Music, Spotify, and others; however, the concern is that Apple could one day choose to discontinue referrals to its rivals.

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