Apple’s Shazam Acquisition Proposal Being Scrutinized By European Union For Antitrust Concerns

The regulator could block the deal altogether, or approve it without conditions.

European Union Aple Shazam
Jack Taylor / Getty Images

The regulator could block the deal altogether, or approve it without conditions.

The European Commission has launched an in-depth investigation into Apple’s acquisition of Shazam, CNN reported today. The European Commission is the continent’s top antitrust regulator and its members are concerned that the merger “could reduce choice for users of music streaming services.”

In December 2017, TechCrunch reported that Apple would be acquiring the music recognition app in an effort to make its presence known in the music services arena. Shazam is a popular app which allows users to identify any song, TV show, or movie in a matter of seconds. The app “scans” an audio clip or a visual fragment, and then points the user to relevant content. The price of the Shazam deal was not revealed by either company, but TechCrunch‘s sources described the deal as a 9-figure proposal, pegging the price at around $400 million. The hefty price tag makes this one of the biggest deals Apple has ever done.

According to the same outlet, Shazam last noted that it passed 1 billion downloads, but that was back in 2016 so it’s safe to assume that those numbers are likely higher today. In 2017, Shazam made around $54 million in revenue, which perhaps goes to show how the number of downloads does not always translate into profits, at least when it comes to mobile applications. In early 2017, Shazam’s CEO noted that the company had started operating near profitability. Naturally, this turned Shazam into an acquisition target.

european regulator shazam merger
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A few days after rumors had surfaced, Apple confirmed the acquisition in a statement first supplied to 9to5Mac.

“We are thrilled that Shazam and its talented team will be joining Apple. Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS. Today, it’s used by hundreds of millions of people around the world, across multiple platforms.”

Alas, the European Commission has stepped in. The regulator, concerned with the fact that this deal would combine two immensely powerful digital music industry players, is concerned the acquisition could give Apple access to sensitive data, which the company could potentially use to harm its competitors.

Margrethe Vestager, the commissions top official in charge of competition, said that, considering the way people listen to music has drastically changed in recent years, Europe’s regulatory body has to conduct an investigation, in order to “ensure that music fans will continue to enjoy attractive music streaming offers.”

According to CNN, the regulator is looking into the acquisition after requests from Sweden, Norway, France, Spain, Italy, Iceland, and Austria. The European Commission said it would complete the investigation by September 2018. They could block the deal altogether, or approve it with or without conditions.