EU Set To Investigate Purchase Of Shazam By Apple

The European Union is made up of almost all European nations, with a central goal of ensuring citizens, businesses’ outputs, and money of all 28 member states can move around freely without excessive restriction.

The EU wears countless hats in terms of regulating business throughout most of the European continent. One piece of headwear that it’s pulled out of the proverbial closet several times recently is that of Sherlock Holmes – that’s the same thing as an investigator, right? – just days ago coming to the conclusion that Google’s search engine and advertising features shouldn’t be under the same umbrella due to shooing away substantial competition due to its self-favoritism in terms of selecting ads put forth by Google itself over its competitors’ media.

Just today, Monday, April 23, 2018, the European Union has kicked off an investigation that looks into the business acquisition of music finder mobile app Shazam by none other than one of the world’s largest companies, Apple.

European Union constituents are worried that the finalized acquisition could very well limit how many options consumers have for selecting music streaming platforms on mobile devices, particularly within the confines of the European Economic Area.

Several countries under the leadership of the EU asked the European Commission to officially make a ruling on whether the merger between the two companies was allowed under the system’s laws. Those countries included Spain, France, Iceland, and Austria.

The European Commission made public that the deal “may have a significant adverse effect on competition in the European Economic Area.”

Apple’s investigation by the thorough, magnifying-glass-wielding, top-hat-wearing Sherlock Holmes lookalike – the European Commission – will be completed by September 4, 2018.

Shazam has grown into quite a popular app since it was founded several years ago. Together, Apple and Spotify – the pair are competitors within the same industry – currently collectively get about one million references from Shazam.

Apple could drown out Spotify’s shares of clicks, which is the primary concern of EU member states.

Apple’s Recent M&A Purchase Reflects a Departure

Apple recently made a tremendous investment in another company. The tech giant has just spent $400 million to acquire a “music discovery app” known as Shazam. The purchase drew attention not so much for the sale price, but for Apple’s involvement. Apple’s business model does not greatly emphasize the purchase of startup properties.

Apple’s past presents a business model many startups seek to emulate. Steve Jobs’ launch of a startup computer company eventually changed the face modern technology. Apple, despite owing its inception to a successful startup plan, has not chosen to take the reigns of other startups. A common business model in the tech industry is to pinpoint startups on the verge of success and purchase them. Hotmail may be one of the most famous examples of a startup purchased by a major player and then taken to lofty heights. Apple continues to leave that business approach to others.

Mergers and acquisitions do not often factor into the Apple business model. The company continues to focus on spending funds, significant funds, on developing new products and concepts in-house. Exceptions to this approach to take place at times. The purchase of the Shazam app indicates Apple may find certain startups valuable enough to acquire. In 2014, Apple spent a massive $3 billion to acquire Beats Electronics. Overall, the past five years have not reflected significant acquisitions activity.

Apple does things a certain way because the established method clearly works well. Apple’s profits and stock prices indicate current policies. Making drastic changes such as shifting resources to expand mergers and acquisitions might not be the best strategy. Things could change in the future. At this time, however, Apple prefers to remain on its traditional course.