BRUSSELS— Apple Inc.’s AAPL 4.01% acquisition of the popular song-recognition app Shazam Entertainment Ltd. may adversely impact competition in Europe, European Union antitrust authorities said Tuesday, announcing they would take over the merger review from national regulators in Austria.
The move fits with a broader strategy by the EU to more closely scrutinize mergers involving data-rich companies, but whose revenue falls below traditional thresholds that determine whether a deal merits a review by EU authorities. Top EU officials often stress the value of data in the marketplace as a “new form of currency.”
Apple said in December it would acquire the UK-based developer at a time when the iPhone maker is looking to boost its music-subscription service. The deal would give Apple ownership of an app that helps users identify unfamiliar songs. It also would give the company access to extensive data and insight on people’s musical interests. Financial terms of the deal weren’t disclosed.
Apple initially registered the deal with regulators in Austria, but the EU said it had concluded that regulators in Brussels were “the best placed authority to deal with the potential cross-border effects of the transaction.” Apple now has to register the deal in Brussels.
Austria, France, Italy, Sweden and several other EU countries asked Brussels to take over the review on concerns the deal could harm competition in their member states as well as impact trade within the European market.
Apple didn’t immediately respond to a request for comment.
Apple and the European Commission, the bloc’s competition regulator, have been at loggerheads over the EU’s decision in 2016 to order the smartphone maker to pay Ireland €13 billion ($16.2 billion) in allegedly unpaid taxes. Both Ireland and Apple are appealing the decision.
The probe into the Shazam acquisition comes as the EU is considering changing its merger review rules to include a wider swath of technology deals that normally wouldn’t fall within its purview, such as a merger involving an acquired company that generates relatively little revenue but holds commercially valuable data.
The commission, which has the power to block deals or seek concessions like the sale of certain assets, only has jurisdiction over a merger if the companies have combined annual world-wide revenue of €5 billion and each has €250 million in revenue within the EU as a whole.
Apple’s acquisition of Shazam doesn’t meet those traditional revenue thresholds but national regulators or companies are allowed to ask the commission to make an exception. Shazam in 2016 posted revenues of about £40 million ($56.2 million), up from about £35 million in 2015.
The commission has been considering the new rules after Facebook Inc. paid roughly $22 billion for WhatsApp—a deal that was eventually cleared unconditionally by the EU in 2014.
The commission wasn’t expected to review the deal because the messaging app doesn’t have sufficient revenue in the region. But Facebook asked the commission for a single review that would cover the 28-nation bloc, rather than face the possibility of separate reviews in three or more EU countries.
—Sam Schechner contributed to this article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
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