Published: Tue, April 24, 2018
Research | By Sheri Schwartz

Apple's Shazam deal faces European probe

Apple's Shazam deal faces European probe

The European Commission has launched an in-depth investigation into Apple's takeover of UK-based music app Shazam after finding the deal could raise competition concerns.

Analysts say the acquisition is part of Apple's renewed push into the music world, giving the company the technology to find what songs people are looking up the most and to create a close relationship with the 1 billion people who have downloaded Shazam's app.

Seven countries including France, Italy and Spain had asked the European Commission to review the deal.

Apple in December officially confirmed the acquisition, which is rumored to be valued around $400 million. In other words, "competing music streaming services could be put at a competitive disadvantage", the commission said in a statement.

The European Commission said it will investigate whether Apple could hurt rival music services by referring Shazam users to iTunes and not others. Shazam, which "listens" to audio playing in an ambient environment and identifies it for users, would likely be integrated into Apple's streaming-music service Apple Music for that feature.

Digital services are increasingly important to Apple as iPhone sales slow.

Apple didn't immediately reply to a request for comment about whether it would do any of those things. The question there is if Apple Music would obtain an unfair competitive advantage with data from the United Kingdom firm it wishes to take over.

Apple's acquisition of Shazam has caught the attention of the European Commission, and not in a good way, with an in-depth investigation being opened over whether it harmfully impacts user choice. Access to such data could allow Apple to directly target its competitors' customers and encourage them to switch to Apple Music.

Shazam is also valuable to Apple for reasons apart from music.

According to the EC, Apple Music has become Europe's second-largest music streaming service provider behind Spotify, and by virtue of the Shazam acquisition "would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services".

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