EU to review Apple's reported $400m purchase of music app Shazam

Apple’s purchase of music recognition service Shazam is to be reviewed by the European Commission following requests from seven countries fearing the deal may “adversely affect competition”.

The EU said on Tuesday that it launched the inquiry into the reported $400m deal for London-based Shazam following requests from Austria, France, Iceland, Italy, Norway, Spain and Sweden. The commission said it was concerned that Apple’s purchase of the market-leading company could have adverse effects on competition across borders.

Apple announced it would buy Shazam in December in a deal worth less than the “turnover threshold” for the EC, but above the merger notification threshold for Austria, which leads the quorum of countries worried by the deal. The iPhone-maker will now be forced to notify EU authorities about the deal and await the investigation into the implications of the deal.

The EC will have up to 35 working days for initial investigations and a further 105 working days should serious concerns be found. Apple will then have the opportunity to obtain approval by addressing any concerns.

Apple declined to comment.

The company’s planned takeover of Shazam would be its largest since the acquisition of Beats for $3bn in 2014, the company that formed the basis of Apple’s music-streaming service and line of headphones and accessories.

Shazam is the market leader in song recognition that listens to snippets of tracks and tells the user the artist and track, allowing them to buy it or find it on streaming services. It was founded in 1999 in the early age of online music, and now accounts for about 1m referrals to Apple Music and Spotify. But Shazam has struggled to find a way to make money from its technology, even as it said that it had reached 1bn downloads on smartphones last year.

Shazam only recently announced it had become profitable, thanks to advertising and click-through to other sites such as Spotify and Apple Music.

While Shazam was a pioneer in music recognition, the technology is also no longer quite as novel, with Google integrating a similar feature directly into its search app on smartphones, as well as local recognition on its Pixel smartphones, and rivals such as SoundHound performing similar functions.

(THE GUARDIAN)