EUROPEAN COMMISSION DG Competition CASE M.8788 – APPLE / SHAZAM (Only the English text is authentic) MERGER PROCEDURE REGULATION (EC) 139/2004 Article 8(1) Regulation (EC) 139/2004 Date: 06/09/2018 This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets. EUROPEAN COMMISSION Brussels, 6.9.2018 C(2018) 5748 final COMMISSION DECISION of 6.9.2018 declaring a concentration to be compatible with the internal market and the EEA Agreement (Case M.8788 – Apple/Shazam) (Only the English version is authentic) TABLE OF CONTENTS 1. Introduction .................................................................................................................. 6 2. The Parties and the Transaction ................................................................................... 6 3. Jurisdiction of the Commission .................................................................................... 7 4. The procedure ............................................................................................................... 8 5. The investigation .......................................................................................................... 8 6. Overview of the digital music industry ........................................................................ 9 6.1. The digital music distribution value chain ................................................................... 9 6.2. Competitive dynamics, key metrics and trends.......................................................... 11 6.3. Digital music streaming services in the EEA ............................................................. 14 6.4. The interaction between ACR software solutions and the digital music industry: music recognition software solutions ......................................................................... 15 6.5. ACR software solution providers in the EEA ............................................................ 16 6.6. The role of data in the digital music industry ............................................................ 18 7. Relevant markets ........................................................................................................ 19 7.1. Legal framework ........................................................................................................ 20 7.2. Software solutions platforms ...................................................................................... 20 7.2.1. Product market definition ........................................................................................... 20 7.2.1.1. The Notifying Party's view ........................................................................................ 21 7.2.1.2. Commission's assessment .......................................................................................... 21 7.2.2. Geographic market definition .................................................................................... 21 7.2.2.1. The Notifying Party's view ........................................................................................ 21 7.2.2.2. Commission's assessment .......................................................................................... 22 7.3. Digital music distribution services ............................................................................. 22 7.3.1. Product market definition ........................................................................................... 22 7.3.1.1. The Notifying Party's view ........................................................................................ 22 7.3.1.2. Commission’s assessment .......................................................................................... 22 7.3.2. Geographic market definition .................................................................................... 23 7.3.2.1. The Notifying Party's view ........................................................................................ 23 7.3.2.2. Commission’s assessment .......................................................................................... 24 7.4. ACR software solutions, including music recognition apps ...................................... 24 7.4.1. Product market definition ........................................................................................... 24 7.4.1.1. The Notifying Party's view ........................................................................................ 24 7.4.1.2. Commission's assessment .......................................................................................... 24 7.4.2. Geographic market definition .................................................................................... 26 7.4.2.1. The Notifying Party's view ........................................................................................ 26 3 7.4.2.2. Commission's assessment .......................................................................................... 26 7.5. Licensing of music data ............................................................................................. 26 7.5.1. Product market definition ........................................................................................... 26 7.5.1.1. The Notifying Party's view ........................................................................................ 26 7.5.1.2. Commission's assessment .......................................................................................... 27 7.5.2. Geographic market definition .................................................................................... 27 7.5.2.1. The Notifying Party's view ........................................................................................ 27 7.5.2.2. Commission's assessment .......................................................................................... 27 7.6. Online advertising ...................................................................................................... 28 7.6.1. Product market definition ........................................................................................... 28 7.6.1.1. The Notifying Party's view ........................................................................................ 28 7.6.1.2. Commission’s assessment .......................................................................................... 28 7.6.2. Geographic market definition .................................................................................... 28 7.6.2.1. The Notifying Party's view ........................................................................................ 28 7.6.2.2. Commission’s assessment .......................................................................................... 29 8. Competitive Assessment ............................................................................................ 29 8.1. Introduction ................................................................................................................ 29 8.2. Market shares ............................................................................................................. 30 8.2.1. Software solutions platforms ...................................................................................... 30 8.2.2. Digital music streaming apps ..................................................................................... 30 8.2.3. ACR software solutions, including music recognition apps ...................................... 32 8.2.4. Licensing of music charts data ................................................................................... 35 8.2.5. Online advertising ...................................................................................................... 35 8.3. Assessment of horizontal effects ................................................................................ 36 8.3.1. Legal framework ........................................................................................................ 36 8.3.2. Licensing of music charts data ................................................................................... 37 8.3.2.1. The Notifying Party's view ........................................................................................ 37 8.3.2.2. Commission's assessment .......................................................................................... 37 8.3.3. Online advertising ...................................................................................................... 38 8.3.3.1. The Notifying Party's view ........................................................................................ 38 8.3.3.2. Commission's assessment .......................................................................................... 38 8.4. Assessment of non-horizontal effects ........................................................................ 39 8.4.1. Legal framework ........................................................................................................ 39 8.4.1.1. Vertical non-coordinated effects ................................................................................ 39 8.4.1.2. Conglomerate non-coordinated effects ...................................................................... 39 8.4.1.3. Other non-coordinated effects ...................................................................................