Apple shares closed lower in the US Monday, ahead of news the European Union’ Competition Commission will investigate the tech innovator’s acquisition of music recognition service Shazam. The EU is concerned the purchase could reduce consumer choice of music streaming providers.
Apple shares ended 0.29% lower at $165.24, in the US Monday. However, the stock is currently trading higher in pre-market activity.
The European Commission released an update Tuesday, informing interested parties of its intention to run an in-depth competition investigation into Apple’s planned purchase of Shazam.
“The way people listen to music has changed significantly in recent years, with more and more Europeans using music streaming services,” said EU commissioner, Margrethe Vestager.
“Our investigation aims to ensure that music fans will continue to enjoy attractive music streaming offers and won't face less choice as a result of this proposed merger.”
The EU’s concerns stem from the fact that Apple already runs a music streaming service, Apple Music. It suggests that by purchasing Shazam, it could likely reduce other music streaming services’ competitive advantage.
Shazam isn’t a typical music streaming service. Users of the app are able to identify songs by pointing their smartphone’s speaker to a device playing a song they like, but don’t know.
However, if Apple successfully purchases Shazam, it could put Tim Cook’s tech firm at an advantage over its competitors, due to the likely close links between the two apps that could develop, post purchase. That could include Apple’s access to Shazam’s user database.
“At this stage, the Commission is concerned that, following the takeover of Shazam, Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA,” the Commission stated among its initial concerns.
“Access to 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 be put at a competitive disadvantage,” the EU Commission said.