In December, Apple announced that it would acquire Shazam, a music identifier app. Whilst Apple’s plans with the company are vague at the moment, the European Commission’s plans are clear.
The Commission will investigate the impact the acquisition may have on digital and music markets in Europe. The deal itself is reported to be worth $400 million, whilst for you and me this may be a colossal sum of money, it isn’t big enough to automatically trigger the Commission to investigate.
The Commission’s initiative has come via regulators in Austria. Under Austrian rules the regulators are required to sign off on the deal, the regulators passed this onto the Commission. A number of other European countries also agreed with Austria’s decision to concerns that the acquisition by Apple will “adversely affect competition in the European Economic Area”.
The Commission has provided a brief statement:
“Austria submitted a referral request to the Commission pursuant to Article 22(1) of the EU Merger Regulation. This provision allows member states to request that the Commission examine a merger that does not have an EU dimension but affects trade within the single market and threatens to significantly affect competition within the territory of the member states making the request… 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 Commission will now ask Apple to provide detail about its recent purchase. Once the Commission has this it will review the deal and there is the possibility that a more substantial investigation will be required.
