A proposed acquisition of Shazam by Apple is thrusting the company behind the music recognition and discovery app of the same name back into the news thanks to a new investigation by the E.U. That’s according to a new press release from the European Commission, which says that the investigation will center around whether or not the acquisition would be anti-competitive. Specifically, the commission cites concerns that the merger of the two entities would “reduce choice for users of music streaming services.” Moreover, there is a worry that Apple would be able to use the data obtained by Shazam about competing services to target those customers more directly and aggressively. That would arguably be a massive advantage over the competition since it would effectively be identifying information about competitors’ user bases that those other companies don’t have access to.
In addition to those concerns, Shazam will currently send its users to services that compete with Apple’s after discovering a song’s title and artist via the app. That might come to an end, following the acquisition, removing a substantial referral network for the competition – such as Google Play Music. Instead, it might begin redirecting those users to Apple’s own services, such as iTunes or Apple Music. Tying into that, and into other concerns, Shazam is the number one music recognition service. Apple’s music services are the second most popular in Europe, so the implications of any of those scenarios could be bad enough for competition to halt the merger under European law.
Having said that, there’s really no way to know which way the European Commission will rule on this merger. As is always the case, the outcome will almost certainly come down to other key aspects of the merger discovered through the investigation. The success of the merger could also hinge on promissory statements or agreements if Apple is willing to go that route. Whatever happens, Google, for one, is not sitting idly back waiting for the level of competition to get out of hand. Instead, it’s reportedly working on rolling its own music service into a new offering under the already hugely popular YouTube branding. Those efforts aren’t guaranteed to succeed, either, but it may be helpful if the Apple merger moves forward. As of this writing, the European Commission has until September 4 to reach a decision.