The European Commission has announced a review of Apple’s acquisition of music discovery service Shazam — agreeing to a request made by several countries to weigh competition concerns.
Apple officially announced it was buying UK tech veteran Shazam back in December. It did not disclose the price-tag for the deal but sources suggest it’s paying in the region of $400 million.
At the time it described its Apple Music streaming service and Shazam’s music discovery offering — aka an algorithmic music recognition engine that can ID whole tracks just by listening to a few seconds — as “a natural fit”, adding: “We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”
In a press release today the Commission said it had accepted a request by seven European countries to assess the proposed acquisition — which it says “may threaten to adversely affect competition in the EEA” (European Economic Area).
A provision in EU law allows Member States to submit a request to the executive body to examine a merger that does not have an EU dimension — on account of it not meeting the turnover thresholds set by the EU Merger Regulation — but which nonetheless affects trade within the EU Single Market and threatens to significantly affect competition within the territory of the countries making the request.
The EC said EU Member State Austria submitted the initial request, with Iceland, Italy, France, Norway, Spain and Sweden joining subsequently.
“On the basis of the elements submitted by Austria and the countries joining the referral request, and without prejudice to the outcome of its full investigation, the Commission considers that the transaction may have a significant adverse effect on competition in the European Economic Area,” it writes. “The Commission has also concluded that it is the best placed authority to deal with the potential cross-border effects of the transaction.”
The Commission added that it will now ask Apple to notify the transaction.
We’ve reached out to Apple for comment and will update this post with any response.
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