EU Commission Approves Apple-Beats Deal

In line with expectations, the European Commission has reviewed the $3 billion Apple–Beats Electronics merger and given the green light to the deal today. EU regulators have examined the merger to prevent any harmful effect on competition (via Engadget).

After looking into the deal, the EU commission issued a press release today highlighting their findings:
• both Apple and Beats sell headphones, but their combined market share is low, and does not raise competition concerns;
• the two are not close competitors
• after the Apple–Beats deal closes, there will still be plenty of competitors in the market such as Bose, Sennheiser, and Sony.

After examining the merger’s effect on the music streaming service, the EU commission found that Apple and Beats do offer music streaming services in the US. Since we can expect iTunes Radio to launch in Europe as well, the commission concluded that Apple will face plenty of competitors in the area, 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 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.

The EU commission’s approval represents the first step toward clearing the way ahead for the Apple–Beats merger. We can expect the same from the US regulators, as well.