European Commission opens in-depth investigation of Apple-Shazam deal

Apple’s $400 million acquisition of music identification service Shazam will likely be delayed, due to a just-announced decision by the European Commission to open an “in-depth investigation” into the deal. The EC expects to determine whether Apple’s purchase and integration of Shazam will discourage music streaming deals and options, harming European consumers.

U.K.-based Shazam is best known for an eponymous app that listens to an environment’s music and identifies tracks based on matching snippets against an extensive audio database. In addition to standalone apps across multiple platforms, Shazam’s identification technology has been integrated into Apple’s software for years, and can point users towards full tracks to purchase or stream.

“The way people listen to music has changed significantly in recent years,” said EC Commissioner Margrethe Vestager, “with more and more Europeans using music streaming services. 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.”

According to the EC, Apple Music has become Europe’s second-largest music streaming service provider behind Spotify, and by virtue of the Shazam acquisition “would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services.” This would enable Apple to target rivals’ customers, as well as potentially cutting off referrals from Shazam to rival services.

The EC says that it now has until September 4, 2018 to make a decision on whether the deal will reduce choice for users of music streaming services, though it isn’t necessarily a deal-killer, claiming that the “opening of an in-depth investigation does not prejudge the outcome of the investigation.” Regardless, the timing isn’t great for Apple, as it suggests the transaction will remain unfinished until around the time iOS 12’s gold master is shipping on the latest iPhones and iPads. Any deeper integration of Shazam and Siri will likely have to wait until a later point or major release.