Wednesday, February 7, 2018

European Commission to investigate Apple’s Shazam acquisition | UNLIMITED | CMU


The European Commission has announced that it will investigate the potential impact of Apple’s acquisition of Shazam on the digital and music markets within Europe.

Apple confirmed it was acquiring the popular audio-recognition app back in December. Quite what the tech giant plans to do with Shazam’s app, know-how and brand is not yet clear, though it is thought the audio ID technology may be used to enhance the Apple Music streaming service in one way or another.

The interference of the European Commission could scupper those plans though. The Shazam deal, reportedly worth $400 million, wasn’t actually big enough for the EU to automatically investigate the transaction. However, the deal required approval from regulators in Austria under merger rules there, and it has decided to bounce the investigation up to the EC.

Six other European countries subsequently backed Austria’s call for the Commission to investigate whether Apple owning Shazam will “adversely affect competition in the European Economic Area”.

The EC said in a statement yesterday: “Austria submitted a referral request to the Commission pursuant to Article 22(1) of the EU Merger Regulation. This provision allows member states to request that the Commission examine a merger that does not have an EU dimension but affects trade within the single market and threatens to significantly affect competition within the territory of the member states making the request”.

It added: “On the basis of the elements submitted by Austria and the countries joining the referral request, and without prejudice to the outcome of its full investigation, the Commission considers that the transaction may have a significant adverse effect on competition in the European Economic Area. The Commission has also concluded that it is the best placed authority to deal with the potential cross-border effects of the transaction”.

Apple will now need to provide EC officials with information about its Shazam acquisition. Those officials will then review the deal with the option of instigating a more detailed investigation if they think there are legitimate concerns. If that occurred, Apple could offer remedies to the EC to address said concerns.

Shazam does currently promote digital music services that compete with Apple within its app, allowing people to link through and play identified tracks on other streaming platforms. Once in Apple’s ownership, it might not want to promote its rivals in that way and, equally, its rivals might not want the tech giant knowing how many Shazammers are clicking through to their services.


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