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| Apple's purchase of Shazam was paused by the European Union pending an antitrust investigation. Pictured above is Apple's logo on a building in Brussels. Photo: Emmanuel Dunand/AFP/Getty Images |
By Alex Perry, International Business Times - Business
Global tech giant Apple hit a snag in its latest acquisition, with European antitrust regulators opening an investigation Monday into the company's purchase of Shazam in December.
A press release from the EU’s European Commission explained concerns about the consumer and ethical ramifications of Apple buying the song-identifying app. The commission is wary of the merger limiting the number of choice consumers have in streaming music.
"The way people listen to music has changed significantly in recent years, with more and more Europeans using music streaming services,” Margrethe Vestager, European Commissioner for Competition, said in a statement. “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."
Apple announced on Dec. 11, 2017, that it would purchase Shazam in one of the company's largest acquisitions ever, with an estimated value of $400 million. Shazam’s main purpose is to use the microphone on smartphones to listen to songs and provide valuable information to users, such as song title, artist and more.
The Siri feature available on iOS devices can already recognize songs, but there are other competitive reasons why Apple might want to acquire Shazam, and why the EU would be concerned about such a merger.
Shazam points the user toward music streaming services like Apple Music and Spotify, where the song they identified can be listened to or purchased. That feature is key to the European Commission’s investigation, as the regulatory body is concerned that Apple shutting off referrals to other services could hurt competition.
The biggest concern, however, appears to be the fact that the acquisition could give Apple access to data about its competitors’ customers. Such data could theoretically be used to target those customers and coax them into using Apple Music instead of whichever service they prefer.
The investigation came after countries like France, Iceland and Norway requested one from the commission. If the European Commission finds significant antitrust issues, the merger could theoretically be put on hold.
Shazam has accumulated more than one billion downloads around the world, per CNN Money.
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