European regulators have given the green light to Apple’s December 2017 acquisition of music and image recognition discovery firm Shazam.
Apple Music is the second largest music streaming service in Europe, after Spotify. While Shazam offers what has been described as “a leading music recognition app” in the region (and globally).
TechCrunch broke the news of the acquisition last year — reporting the price for Apple picking up the veteran UK startup to be in the region of $400 million. Apple confirmed our scoop a few days later.
But two months later European Union competition regulators said they were reviewing the deal, a move triggered by concerns raised by multiple countries in the European Economic Area (EEA).
Then in April the Commission stepped the review up into a full-blown investigation.
Today, after carrying out its in-depth probe, the Commission says it’s satisfied the deal will not adversely affect competition in the EEA — and has given it the go-ahead.
Commenting in a statement, antitrust chief Margrethe Vestager, said: “Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam’s user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market.”
We’ve reached out to Apple for comment.
In reaching this decision, the Commission found that Apple and Shazam mainly offer complementary services that do not compete with each other.
It says its investigation looked at:
- whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether 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 have been put at a competitive disadvantage
- considering Shazam’s strong position in the market for music recognition apps, whether Apple Music’s competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them
The decision to clear the deal was made after what it describes as “a wide range of investigative measures” were undertaken. It also says it took feedback from “key market participants in the digital music industry, including providers of music streaming and music recognition services, as well as other stakeholders”.
It said today that it does not believe the merged entity will be able to shut out competing providers by accessing commercially sensitive data about their customers — viewing Shazam’s data holdings as unable to “materially increase Apple’s ability to target music enthusiasts”.
It also does not believed the merged entity could shut out competing providers by restricting access to the Shazam app — saying the app has “a limited importance as an entry point to the music streaming services of Apple Music’s competitors”.
The Commission has also judged the combined user datasets of Shazam and Apple as not able to confer “a unique advantage to the merged entity in the markets on which it operates”.
“Any concerns in that respect were dismissed because Shazam’s data is not unique and Apple’s competitors would still have the opportunity to access and use similar databases,” it added.