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European Commission approves Apple's purchase of Shazam

Sunday, 23 September 2018

Monday, 10 September 2018

Travers Smith LLP advised market-leading music recognition app Shazam on the European Commission's investigation into its acquisition by technology giant Apple.

Although the deal did not meet the EU merger control thresholds, in February this year the European Commission started a merger investigation into Apple's purchase of Shazam following calls from Austria, France, Iceland, Italy, Norway, Spain and Sweden.  The case was referred for a more in-depth Phase II merger investigation in April, and was eventually cleared by the European Commission last week.

While Shazam and Apple do not compete in the online music space, the Commission had been concerned that Apple could use Shazam's strong position in music recognition to undermine Apple Music's competitors by removing Shazam as a source of customer referrals to them in future.  The Commission also raised concerns that Apple may be able to use Shazam's user data to directly target the customers of other online music streamers, and place those companies at a disadvantage to Apple Music. 

Following a lengthy and detailed investigation, the Commission decided that neither issue was a concern, and that the deal would not raise competition concerns in Europe.

This is one of the most significant EU merger investigations of 2018, and a case that involved a number of important issues relating to data and the digital economy.  Margrethe Vestager, EU Competition Commissioner said: “Data is key in the digital economy. We must therefore carefully review transactions which led to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam’s user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market.”

The Travers Smith Competition team was led by Partner Stephen Whitfield, together with Associates Richard Brown and Ingrid Rogers.