Apple closes $400 mn Shazam Acquisition
Shazam App to soon Become Ad-Free For All Users
Apple today announced it has completed its acquisition of Shazam. The $ 400 million deal was announced by Apple in December 2017, however it was approved by the European Commission only recently (6th September).
Shazam lets users identify songs simply by listening to the music playing around them. The app will soon offer its experience ad-free for all users so everyone can enjoy the best of Shazam without interruption.
Shazam has been downloaded over 1 billion times around the world, and users identify songs using the Shazam app over 20 million times each day.
Advertisements have been one of the primary revenue sources for Shazam, which recorded revenues of around $54 million in fiscal 2016.
“Apple and Shazam have a long history together. Shazam was one of the first apps available when we launched the App Store and has become a favorite app for music fans everywhere,” said Oliver Schusser, Apple’s vice president of Apple Music. “With a shared love of music and innovation, we are thrilled to bring our teams together to provide users even more great ways to discover, experience and enjoy music.”
“Data is key in the digital economy. We must therefore carefully review transactions which lead 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,” said Commissioner Margrethe Vestager, in charge of competition policy of the European Commission.
The Commission had conducted an in-depth investigation to assess:
- whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music. As a result, competing music streaming services could have been put at a competitive disadvantage.
- considering Shazam’s strong position in the market for music recognition apps, whether Apple Music’s competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them.
After undertaking a range of investigative measures and receiving feedback from key market participants in the digital music industry, including providers of music streaming and music recognition services, as well as other stakeholders, the Commission found that:
- the merged entity would not be able to shut out competing providers of digital music streaming services by accessing commercially sensitive information about their customers. In particular, access to Shazam’s data would not materially increase Apple’s ability to target music enthusiasts and any conduct aimed at making customers switch would only have a negligible impact. As a result, competing providers of digital music streaming services would not be shut out of the market;
- the merged entity would not be able to shut out competing providers of digital music streaming services by restricting access to the Shazam app. This reflects the fact the app has a limited importance as an entry point to the music streaming services of Apple Music’s competitors; and
- the integration of Shazam’s and Apple’s datasets on user data would not confer a unique advantage to the merged entity in the markets on which it operates. Any concerns in that respect were dismissed because Shazam’s data is not unique and Apple’s competitors would still have the opportunity to access and use similar databases.
