EU to launch investigation into Apple/Shazam merger

After requests from several European countries, including France, Italy, Spain and Sweden, the EU has announced it will be launching an investigation into Apple’s acquisition of Shazam. Shazam is the world’s leading music recognition system. It has a total of 1 billion downloads and is used 20 million times a day on average. Apple’s deal to buy the app, which allows users to identify songs via their smartphone and link them to music subscription services, is worth $400 million and was confirmed in December last year.

What are the concerns?

In the last three years, Apple Music has become the second largest music streaming service provider in Europe. Shazam is the leading music recognition app, both in the EU and worldwide. The EU plans to launch an in depth investigation under the EU Merger Regulation over the following concerns:

• The strong market position of both Apple and Shazam could mean a merger could harm consumer choice
• The merger could give Apple an unfair advantage over its competitors through access to user data
• This could help Apple to unfairly gain customers over other sites
• Shazam could hold commercially sensitive data on Apple’s competitors and consumers

How will the commission respond?

The commission has noted that Apple Music has now become the second biggest music streaming service in the whole of Europe. In a statement, they said: “Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music. As a result, competing music streaming services could be put at a competitive disadvantage.” They added that the investigation will need to look at the effect the merger could have on competition; for example, whether Apple would be discontinuing referrals from Shazam to other sites like Spotify or Deezer.

Competition commissioner Margrethe Vestager said: “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.”