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.