Europe ponders whether Apple Shazam buy is too much like iSpy

The European Commission has launched an investigation into Apple’s acquisition of Shazam over fears the iLeader might be able to spy on competitors.

As the second largest music streaming service in Europe, the European Commission fears acquiring the popular music recognition app Shazam would offer Apple the opportunity to obtain commercially sensitive data about customers of its competitors. By accessing this information, the iChief might be able to directly target its competitors’ customers and encourage them to switch to Apple Music. Such access to user data would be very poorly received by the competition-sensitive regulators.

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

The acquisition of the London-based music and image recognition service was confirmed back in December, with Apple trying to build on a successful couple of months in the music business. The price of the acquisition has not been released to date, though it has been rumoured to be in the region of $400 million. To date, the app has been downloaded more than a billion times.

One area which might be of concern for the busybody bureaucrats is how Shazam has continued to link its services to other organizations. Once a consumer uses the app to recognise a song, the app then links to other websites to download and purchase various bits of content. One aspect of the investigation would aim to understand whether discontinuing this referral system would damage the commercial capabilities of competitors, or give Apple an unfair advantage.

We’ll answer this question for the lethargic legislators; it would. Took us ten seconds to mull over the question, whereas the pointless public servants would consider the question for months, while expensing chocolate covered waffles, and clock-watching from lunch-time.

In light of the referral scheme and also access to commercially sensitive data of competitor customers, you have to wonder whether this acquisition has the legs to get it through a competition investigation.

Have you heard? Apple is buying Shazam

US gadget giant Apple has made a rare foray into major M&A with the acquisition of UK audio recognition app Shazam.

Despite having enough money to buy the entire world and still leave a generous tip, Apple is notoriously reluctant to get its cheque book out. One exception to this is the music business, which was after all the source of Apple’s renaissance thanks with the iPod and iTunes, and which saw Apple fork out $3 billion for Beats a few years ago.

Shazam has been around forever by app standards and was one of the first bits of cleverness to appear on a smartphone. It uses the phone’s microphone to listen to pieces of audio and then tells you what they are. When it first came out it was easy to believe it might represent the future of music discovery until everyone realised that it’s very rare to hear a piece of music that a) you like, b) you can’t identify and c) is not being introduced by another person.

But Apple, in its infinite wisdom, sees beyond such trivia and can apparently see great things for Shazam. Music streaming services, a market in which Apple is a minor player but would sincerely like to be a bigger one, do apparently receive a significant amount of traffic from Shazam. It would be entirely in keeping with its closed ecosystem philosophy for Apple to buy Shazam and then stop it referring to any streaming services other than its own.

This story was leaked last week and, while Apple hasn’t issued a formal press release, it has issued the following statement to lots of media. It also hasn’t confirmed a sale price but this is being widely speculated to be in the region of $400 million, significantly lower than the company had previously been valued at.

“We are thrilled that Shazam and its talented team will be joining Apple. Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS. Today, it’s used by hundreds of millions of people around the world, across multiple platforms. Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

Another possible motivation for this move could be defensive manoeuvres. It has been reported that both Spotify and Snapchat had been sniffing around Shazam and maybe Apple just didn’t like the idea of anyone else having it. The recent news about Spotify getting into bed with Tencent indicates the internet music space is heating up once more.

Here are the most Shazamed tracks this year – look at the state of it:

Ed Sheeran – “Shape Of You”

Luis Fonsi Feat. Daddy Yankee – “Despacito”

Clean Bandit Feat. Sean Paul & Anne-Marie – “Rockabye”

Charlie Puth – “Attention”

The Weeknd Feat. Daft Punk – “I Feel It Coming”

J Balvin & Willy William – “Mi Gente”

Kygo & Selena Gomez – “It Ain’t Me”

The Chainsmokers & Coldplay – “Something Just Like This”

Harry Styles – “Sign Of The Times”

Burak Yeter Feat. Danelle Sandoval – “Tuesday”

Ofenbach – “Be Mine”

Calvin Harris Feat. Pharrell Williams & Katy Perry & Big Sean – “Feels”

Portugal. The Man – “Feel It Still”

Imagine Dragons – “Believer”

Kaleo – “Way Down We Go”