Apple's Shazam Buy Probed as EU Targets Music App's Data
(Bloomberg) -- Apple Inc.’s takeover of music-identification service Shazam faces an extended European Union probe as antitrust regulators raised concerns that the iPhone maker could use the app’s data to lure customers to its own music service.
The EU set a Sept. 4 deadline to investigate whether Apple might get unfair access to commercially sensitive information about users of rival music-streaming services. It will also check if Apple Music competitors would be harmed if Apple were to stop Shazam referring customers to them.
"Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music," the EU said in an emailed press release. "As a result, competing music streaming services could be put at a competitive disadvantage."
Europe’s antitrust enforcers are increasingly concerned about how technology companies use data. Facebook Inc. was fined a year ago for failing to disclose that it could merge its own data with the messaging app WhatsApp during a 2014 merger review. EU Competition Commissioner Margrethe Vestager has talked about data as a currency for free services and how smaller companies may struggle to compete with data-rich rivals.
Apple declined to comment on the EU review.
European consumer advocates BEUC said the takeover is the latest in a long line of popular services "being swallowed by a few online giants."
"If these new services then become part of this established company’s ecoystem there is a risk that it will lead to less choice for consumers," Agustin Reyna of BEUC said in an emailed statement.
The Shazam app uses the microphone on a smartphone or computer to identify almost any song playing nearby, then points users to places they can listen to it, such as Apple Music or Spotify Ltd. The deal is one of Apple’s largest acquisitions, at a reported $400 million according to people familiar with the transaction last year.
For Apple, the merger probe comes as it fights the EU’s 2016 order to repay some 13 billion euros ($15.9 billion) in back taxes to Ireland. The EU has sued Ireland for failing to collect the money on time.
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