Apple’s acquisition of Beats has gained approval from the European Commission. The Commission concluded that the combination of these businesses does not raise any competition concerns because their combined market share is low, and because the two companies themselves aren’t “close competitors”.
The headphones offered by each company, the Commission said, differ “markedly in functionality and design”. Also, it noted, a “large number of global competitors” will remain. It cited Bose, Sennheiser and Sony specifically.
“The Commission also examined the transaction’s likely effects on the distribution of digital music to consumers,” the Commission said in a statement. “Both Apple and Beats Music are active in this field. Apple offers a music downloading service through iTunes and Beats Music offers a music streaming service, although it is currently not available in the EEA. The Commission concluded that Apple faces several competitors in the EEA such as Spotify and Deezer, making it implausible that the acquisition of a smaller streaming service that is not active in the EEA would lead to anticompetitive effects.”
“The Commission also concluded that the transaction would not give Apple the ability and incentive to shut out competing streaming services from access to iOS, Apple’s operating system for mobile devices,” it added. “It based this conclusion, amongst others, on the fact that Apple was already active in the distribution of digital music before the merger. Hence, the merger would not change Apple’s ability or incentive to block access to its iOS.”
Apple announced the acquisition in May. The deal still requires approval in the U.S., which seems likely.
Last week, news emerged that Bose is suing Beats in relation to headphone technology patents.
In related news, Re/code is reporting that Apple is close to buying Swell, a talk radio app, for about $30 million. The companies aren’t commenting on this, but according to the report, much of the Swell team would join Apple.
Image via BeatsByDre.com