$400 million purchase gives Apple exclusive access to audio recognition technology patents
It was nearly a year ago that Apple announced its plans to buy the popular music-identification company Shazam — plans that have largely been stalled because of an European Union investigation. After several months of inquiry, however, the EU cleared the move, and the tech giant is now set to finalize its $400 million acquisition.
Almost right after Apple’s December 2017 announcement, several European countries, including Austria, France and Spain, requested a review of the purchase under EU merger law, concerned about how other music-streaming services — Spotify and Deezer for instance, both of which are headquartered in countries in the EU — might fare if Shazam were to introduce exclusive features with Apple Music. The EU has now decided that won’t be the case.
“After thoroughly analyzing Shazam’s user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market,” European Commission head Margrethe Vestager said in a statement. The group also reports that “access to Shazam’s data would not materially increase Apple’s ability to target music enthusiasts and any conduct aimed at making customers switch would only have a negligible impact.” Read: Apple Music’s integration of Shazam will not lure a significant number of streaming users away from other services.
But that doesn’t mean Shazam doesn’t offer crucial advantages to the tech giant, which has been gaining on its older competitors (namely, Spotify) since launching in 2015. Apple Music currently has 50 million subscribers; Shazam, which launched in 1999 and over the years grew into a household name, says it has more than 120 million monthly active users who’ve collectively downloaded the app more than 1 billion times and used it to identity 15 billion songs.
Beyond simply getting access to that large user base, though, Apple’s $400 million also buys it all of Shazam’s hundreds of audio recognition technology patents. That is coveted intellectual property for a tech company that is trying to rapidly grow its digital music offerings with features its rivals don’t have — and now can’t have.
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