On April 23, the European Commission (EC) announced it had opened an “in-depth investigation” into Apple’s proposed acquisition of music recognition app Shazam. The EC seeks to determine whether the merger breaches competition guidelines.
Shazam is one of the world’s most popular mobile apps, with more than one billion downloads to date. Every year, the app helps between 300 and 400 million users identify songs at the push of a button, solving a long-standing problem for music lovers the world over.
The EC’s investigation centres on whether Apple can leverage Shazam’s popularity – as well as its vast database of user preferences – to poach users from rival music streaming services.
The European Commission’s investigation centres on whether Apple can leverage Shazam’s popularity to poach users from rival music streaming services
“At this stage, the commission is concerned that, following the takeover of Shazam, Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the [European Economic Area],” read the EC statement.
“Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music.”
Currently, when a song is identified on Shazam, the app offers the user links to various music services to enable them to buy the song. If Apple is able to eliminate its competitors from Shazam’s purchasing options, it could, in theory, maximise referrals to its own streaming service. That said, the EC does not consider Shazam as a key entry point for music streaming.
Apple confirmed its merger with Shazam in December 2017, saying it had “exciting plans in store” for the platform. However, the company did not elaborate on its plans, nor on the cost of the deal, which is rumoured to have been around $400m.
Seven European countries – including France, Spain and Sweden – referred the merger to the EC on competition grounds, leading to the current probe.