After announcing last December that it has acquired music identification app Shazam for an undisclosed amount, Apple will now face the next key step in the acquisition process: answering regulatory queries. The European Commission, in particular, says it plans to examine Apple"s acquisition of Shazam following the requests from multiple countries such as Austria, France, Iceland, Italy, Norway, Spain, and Sweden.
The goal of the assessment is to determine the impact of Apple"s takeover of Shazam on local competition in Europe. The EC admits that it is currently concerned with the potential threat the deal may pose to market competition in the region. It"s possible that European regulators could launch a broader investigation if the transaction proves to be detrimental to competition.
More specifically, the EC finds that Apple"s proposed purchase of Shazam fails to comply with the standards set by the EU Merger Regulation for companies acquiring smaller firms within the region. In Austria, however, the transaction is said to have met the national merger notification threshold.
Apple"s Shazam acquisition could have an adverse effect on Spotify"s current market share. As of June last year, Apple Music was trailing behind Spotify with 27 million paid subscribers, while the latter had more than 50 million customers. It"s worth pointing out, though, that both music streaming services get 1 million clicks per day through Shazam alone. Although it"s not immediately clear what Apple plans to do with Shazam following the acquisition, the deal should be of a big concern to Spotify and the competition as a whole.
Source: European Commission via The Verge