Apple-Shazam Deal May Hurt Competition in Europe, EU Says

Apple’s takeover of music-identification service Shazam may threaten competition and should be reviewed by the European Commission, the regulator said, according to Bloomberg. Apple will be told to file the transaction to the Brussels-based antitrust authority, who will take over the merger review from Austria, where it was originally declared.

Big technology mergers involving startups with insignificant revenue usually fall through the EU’s usual net for checking whether deals harm competition across the bloc. However, alarmed that it nearly missed Facebook’s takeover of messaging service WhatsApp, the EU is seeking to change its rules to allow it to take charge of acquisitions where a target company makes no money but holds valuable technology or intellectual property.

Apple announced its purchase of the U.K.-based app in December, for a reported $400 million, which would make it one of Apple’s largest acquisitions. The EU may be worried that once Shazam is under Apple’s control, the iPhone maker could choose to make Apple Music the only option for listening to tracks. That could divert some of the referrals from Shazam that currently go to Spotify. The acquisition also gives Apple access to a large user data base of people’s musical interests.

Apple hasn’t indicated that it plans to make Shazam an exclusive for Apple Music, but in the past the company has sometimes made acquired features compatible only with its products. Apple said it would work with the EU on the matter, but declined to provide further detail. The EU took up the review after Austria, Iceland, Italy, France, Norway, Spain and Sweden all asked it to do so.