European regulators have opened an investigation into iPhone maker Apple’s takeover (NASDAQ:AAPL) of Shazam over concerns that the deal could limit choices for users of music streaming services.
EU Commissioner Margrethe Vestager, said the 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.”
If it goes ahead, the proposed transaction, which was arranged last December, would allow Apple Music, the group’s music streaming service – now the second-biggest of its kind in Europe – to gain access to Shazam, a music recognition app for mobile devices across Europe and internationally.
At this point, the European Commission is concerned that following its takeover of Shazam, Apple would obtain access to data about the customers of its competitors, which could pose an unfair advantage.
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“Access to such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music,” the regulators said. “As a result, competing music streaming services could be put at a competitive disadvantage.”
Regulators are also looking into whether Apple Music’s competitors would be harmed if Apple were to discontinue the referrals they now receive from the Shazam app.
The European Commission has until September 4 to deliver a verdict on its investigation.
Apple shares were down 0.45% to US$164.92 on the news. Shares have been under pressure in recent days, falling to bear-market levels.