EU to Probe Apple-Shazam Merger Amid Competition Concerns

(CN) – Apple’s $400 million bid to buy song-recognition app Shazam hit a snag in Europe Tuesday, with regulators announcing they will examine the possibility that the merger may affect competition.

While the merger doesn’t meet turnover thresholds under EU law – meaning the European Commission doesn’t need to be notified and Apple was free to register the merger for clearance in an EU state – the European Commission has been paying more attention to takeovers by data-rich companies in recent years.

In this case, Apple registered the merger in Austria, which asked the commission to get involved. Five other EU states and Norway joined Austria’s request, leading to Tuesday’s announcement by the commission.

“On the basis of the elements submitted by Austria and the countries joining the referral request, and without prejudice to the outcome of its full investigation, the commission considers that the transaction may have a significant adverse effect on competition in the European Economic Area. The commission has also concluded that it is the best placed authority to deal with the potential cross-border effects of the transaction,” the regulatory body said in a statement.

Apple hasn’t revealed its plans for Shazam, which is still live. It may incorporate the app’s song-identifying technology into Apple Music, but if it shuts the app down Sweden-based Spotify would lose referrals. Apple Music and Spotify together nab 1 million clicks per day from Shazam – likely what raised the commission’s interest in the merger.

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