Apple's planned takeover of Shazam draws EU scrutiny
Apple’s planned takeover of music recognition app Shazam may threaten competition and will be reviewed by the European Commission, per Bloomberg. Apple announced the deal with U.K.-based Shazam in December to boost its Apple Music streaming service.
Apple will be told to file details of the transaction to the antitrust authority, which will take over the merger review from Austria, where it was originally started. Iceland, Italy, France, Norway, Spain and Sweden also requested the reviews. Apple said it would work with the EU on the matter, and declined to provide more details.
The Shazam app uses a smartphone or computer microphone to identify almost any song playing nearby, then guides users to places they can purchase or stream the song such as Apple Music or Google’s YouTube.
While it’s not completely clear why some European countries are seeking an antitrust review of Apple’s proposed acquisition of Shazam, regulators may be concerned that Apple will cut off access to the service to other platforms. In the past, Apple has made some features it acquired from takeover targets compatible only with its products. However, the tech giant did release an Android version of Beats Music, which was acquired in 2014 to help develop its music streaming service Apple Music.
The EU may be also be concerned that Apple will make Apple Music the only option for listening to tracks found on Shazam, which currently are referred to Spotify. Apple recently revealed that Apple Music now has 36 million paying subscribers, according to Variety. The most recent figures from Spotify put its subscription base at 70 million. Acquiring Shazam could help Apple boost its play as entertainment across music, video and more grow more important on mobile. Apple also recently said it would look to update its e-book strategy, a potential swipe at Amazon's dominance here.
The Shazam acquisition also gives Apple access to a large user data base of people’s musical interests, and data privacy is a major concern for the EU as it prepares to enforce stricter regulations this year.
The EU in 2014 reviewed and approved Facebook’s $19 billion acquisition of mobile-messaging app WhatsApp after determining the companies weren’t close competitors. Regulators last year fined Facebook $122 million for misleading the EU during the merger probe. The social network had told regulators that it couldn’t combine WhatsApp data with its other services, but went ahead with plans to do so shortly after the deal was completed