European Commission green-lights Apple’s $3B Beats buy

Beats Music (Windows Phone, Android, iOS 001)

The European Commission has okayed Apple’s purchase of the Beats Music streaming-music service and Beats Electronics’ premium headphone business, concluding that the agreement would not be detrimental to consumers across Europe. This is an important though expected development as Apple hopes to complete the $3 billion transaction by the end of the September quarter, pending regulatory approval in the United States…

According to a media release, the Commission has cleared the deal under the EU Merger Regulation legislation, saying Beats and Apple do not compete in Europe in headphones. In fact, headphones from Apple and Beats “differ markedly in functionality and design,” the Commission has concluded after reviewing the competitive landscape.

Bose, Sennheiser, Sony and other competitors in the sector would remain in the business following the deal, the Commission has found. Speaking of Bose, they’re suing Apple for alleged patent infringement related to noise-cancellation technologies.

As an added shield, Apple faces stiff competition in the European music-streaming space, with services like Spotify and Deezer ruling the market.

The Commission did not think that iTunes or iTunes Radio pose a direct threat to Beat Music because the two service do not currently operate in European countries.

Therefore, the Beats buy would not hamper competition nor would it lead to the demise of competing services.

The Commission concluded that Apple faces several competitors in the (European Economic 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.

With the above in mind, the Commission green-lit the Beats buy as the transaction would not give Apple the ability and incentive to shut out competing streaming services from access to iOS.

Indeed, Apple previously stated it intended to keep developing Beats Music for platforms other than iOS, namely Android and Windows Phone.