Iovine Cook Dr Dre Cue Beats

The European Commission has today approved Apple’s acquisition of Beats Electronics and Beats Music. The commission said that the buyout passes merger regulations. The commission concluded that Apple and Beats’ combined marketshare in both the streaming music and headphones markets is low, so an acquisition did not materially affect competition.

In headphones, the EU says that Apple/Beats exists in a global market with numerous other brands, including Bose, Sennheiser and Sony. For streaming music, companies like Spotify and Deezer offered a similar safety buffer. As the EU commission cares only for European operations, the fact that iTunes Radio and Beats Music do not currently operate in European countries also helped the deal go through smoothly.

The board also ruled that the deal would not incentivize Apple to shut out third party music services from the iOS App Store, as a result of the Beats buyout. This is because Apple was already deeply entrenched in the music market before the purchase, so it makes little sense for Apple’s attitude toward music competitors to change after a ‘small’ purchase. More information about the case can be found in the EU competition case directory. Apple is yet to receive approval for Beats in the United States, although Apple has said that it expects the deal to close sometime in the third quarter.