The European Commission announced it has launched an in-depth investigation into the effect that Apple’s acquisition of Shazam might have on the competition in the music streaming industry.

Shazam is a United Kingdom-based distributor of music streaming applications. It mainly profits from online advertising, and commissions from referrals of users to music streaming services.

The concern is that the deal could limit music fans' options for music streaming services in the whole world and especially within the European Economic Area (EEA).

Countries, including France, Austria, and Iceland, requested, in February, that the European commission assess that acquisition to determine whether it’s legal under the EU merger law.

The commission has to make a decision before September 4th.

The nature of the music streaming industry

Both Spotify and Apple gain one million clicks per day through Shazam app. If Apple decided to shut it down or direct referrals to its service only, Spotify would lose a major amount of its traffic. Also, Apple could use Shazam’s data to target its rivals users and direct them to Apple services.

Last December, it was confirmed that Apple was buying Shazam in a deal worth much less than the value that Shazam was valued at, during its last funding round.

The company was struggling to bring enough revenue during 2016.

Apple could benefit from Shazam in several ways, as it’s integrated with Siri, and it could be more integrated with IOS.

Apple could also utilize Shazam’s visual recognition for its ARKit, which is a software development kit to make augmented reality apps for iPhone and iPad.

The Commission's primary concerns

Margrethe Vestager, in charge of competition policy in The European Commission, said that the way of listening to music has changed completely in recent years, with more people using streaming services.

Discuss this news on Eunomia

And that the investigation's purpose is to make sure that fans would be able to listen to music using streaming services without facing limited choices as a result of the, under investigation, merger.

regulators claimed that the ability to access such data might allow Apple to find its competitors' users and make them use Apple services instead, and as a result, competition in the music streaming industry could be put at an unfair competitive advantage.

The Commission now has, until 4 September 2018, to take a decision.