Apple’s $400m Shazam buyout set to win approval in Europe

Apple‘s proposed $400m buyout of music-recognition company Shazam is set to be approved by the European Commission.

That’s according to a Reuters report which says that EU antitrust regulators will approve the acquisition, first announced in December, without demanding any concessions.

The EC opened an official investigation into the deal in April, following a request from seven countries including Austria, France, Iceland, Italy, Norway, Spain and Sweden (home of Spotify).

The EU antitrust enforcer decided that the deal carried a risk of having anti-competitive effects in Europe, despite the fact that the $400m pricetag was under the typical threshold to launch such an investigation.

Commissioner Margrethe Vestager, in charge of competition policy, said at the time: “The way people listen to music has changed significantly in recent years, with more and more Europeans using music streaming services. Our investigation aims to ensure that music fans will continue to enjoy attractive music streaming offers and won’t face less choice as a result of this proposed merger.”

Some industry watchers expect that Apple intends to integrate Shazam’s technology into Apple Music – giving users the ability to discover and ‘capture’ music information without flitting between two apps to do so.

The EU’s antitrust enforcer did raise concerns over Apple stopping Shazam from referring users to rivals of Apple Music – but this now appears to have come to nothing.

“Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music.”

The EC’s announcement of the investigation read: ‘The Commission is concerned that, following the takeover of Shazam, Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA.

Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music. As a result, competing music streaming services could be put at a competitive disadvantage.

‘In addition, while at this stage the Commission does not consider Shazam as a key entry point for music streaming services, it will also further investigate whether Apple Music’s competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them.’

Spotify acquired its own audio recognition tool, Sonalytic, in March last year. As well as connecting audio soundwaves to metadata, Sonalytic said it had the power to personalize playlists using ‘machine-learning algorithms which learn what you like (and what you don’t), then find the music you’ll love’.

Apple Music recently overtook Spotify’s subscriber base in the United States.

According to Apple CEO Tim Cook, the same fact is true across North America (ie. including Canada) – where, according to MBW’s calculations, both Apple and Spotify have more than 25m subscribers each.Music Business Worldwide

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