Back in December, Apple announced it has acquired music identification platform Shazam and has been seeking regulatory approval since. However, the company faces a familiar stumbling block. Once again Europe is sticking it to tech companies. The European Commission says it wants to examine the deal to assess its impact on competition.
The continent’s regulatory body wants a closer look at the acquisition after requests from nations such as Austria, France, Iceland, Italy, Norway, Spain, and Sweden.
In a note this week, the Commission says it wants to assess the potential impact the deal will have on competition. Apple using Shazam could provide unfair competition in the market. If that’s the case, the next step would be a formal investigation and potentially a block on the acquisition:
“Apple’s proposed acquisition of Shazam does not meet the turnover thresholds set by the EU Merger Regulation for mergers that must be notified to the European Commission because they have an EU dimension. It was notified by Apple for regulatory clearance in Austria, where the transaction meets the national merger notification threshold.”
Competition
One company likely to be impacted by Apple’s move is Spotify. The music streaming service competed directly with Apple Music. Shazam is currently used on both services, but Apple could make it an exclusive feature for is streaming service.
Shazam is an app that allows users to easily find music. It currently had over one million clicks across Spotify and Apple Music per day.
Spotify is comfortably the largest streaming service with 50 million subscribers. Apple Music is second with 27 million customers, so the company could argue Shazam will provide more competition to Spotify.
It is unclear whether the Commission is concerned about the impact on Spotify. Arguably, the regulator will be more worried about the Shazam acquisition impacting smaller services.
“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.”
