Apple is finally, after almost a year of halted progress, cleared to move forward with its $400 million acquisition of Shazam, the popular music-identification company. The acquisition has been pending the conclusion of its investigation under European Union merger law.
Apple announced its acquisition plans in December 2017 when a succession of European countries (including Austria, France, and Spain) promptly requested the EU review of the prospective acquisition. The motivation for the inquiry centered around concerns that other music-streaming services (e.g. Spotify) may be adversely impacted if Shazam developed exclusive features with competitor Apple Music. The EU ruled against such concerns.
European Commission head Margrethe Vestager attempted to explain the ruling in a September 6th statement from Brussels:
‘Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analyzing Shazam’s user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market.’
Apple Music will nonetheless acquire some advantages, including access to Shazam’s 120 million active monthly users (Apple Music, launched in 2015, has 50 million subscribers). Perhaps, more importantly, is Apple’s new exclusive claim to all of Shazam’s hundreds of audio recognition technology patents–a key new resource in Apple’s pursuit of digital music dominance.
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