The European Commission (EC) is conducting a comprehensive review of its Merger Guidelines, supported by a broad public consultation. The review aims to determine whether the current framework remains suitable for assessing the competitive effects of mergers, and thus for deciding whether they should be permitted. The EC has also launched a call for tender for an economic study on the dynamic effects of mergers.
The consultation is required because of the significant changes that have shaped the European and global economy in the last 20 years and the need to reflect these changes in the EC’s merger review processes.
THE AIMS OF THE EC’S REVIEW
The EC review has two main aims:
- First, the adequacy of the existing framework for evaluating mergers in fast-moving or emerging markets with unique characteristics (e.g., pharmaceutical, digital platforms, AI); and
- Second, whether—and how—the EC’s merger assessments should reflect the broader political and strategic agenda of the EU including the integration between competition policy and industrial strategy, and to give adequate weight to public policy goals including efficiency, innovation, productivity, international competitiveness, sustainability and clean technology, supply chain resilience, regional security and defence, and labour.
For further information on the consultation see the scope of the Review below.
WHAT DO BUSINESSES NEED TO KNOW?
- The consultation is very broad and covers a wide range of areas. As such it may result in a shift in approach on how mergers are assessed by the EC.
- The first aim is expected to involve a codification of the EC’s current evolved practice in merger cases and reflect the principles created by case law since the adoption of the prior guidelines and systematize its approach to improve predictability around how concerns are identified, assessed, and weighted. By consolidating all these instances in new Guidelines, the EC aims at providing greater legal certainty for businesses.
- The second aim raises legal and practical challenges. The consultation suggests that in the future the EC may consider and place more weight on how competition can affect the broader set of factors that matter to the EU’s prosperity over the long term. However, the EC may not be able unilaterally to incorporate non-competition factors in assessing mergers through guidelines alone. Concerns may also be raised about the EC’s ability to balance such broader policy objectives with competition policy, and about potential political pressure from EU Member States seeking to influence outcomes based on national interests.
- The EC seems open to respond to the growing calls for the creation of “European Champions” to enable European companies to scale up to innovate and to compete more effectively on the global stage.
- The EC is seeking feedback on how innovation could be assessed in a systematic manner in merger review processes, not only as a key parameter for competition, but also in a way that promotes the broader need for innovation in the European economy.
- The EC is seeking feedback on how to systematically assess the “sustainability” impact of a merger. This means that sustainability will become an important parameter to evaluate the potential impact of a merger on innovation, or its negative effects, and this may be a way in which merger policy can assist with the EU’s sustainability objectives.
- The EC is seeking feedback on the parameters that it uses in the assessment of mergers in digital markets, defining the content and boundaries of concepts such as “network effects” or “ecosystems” and how they impact merger review.
- The EC review is part of a longer process that will lead to new or substantially updated Merger Guidelines. While formally binding only on the EC, the new Merger Guidelines are expected to be widely followed by national authorities and influence global merger enforcement.
WHAT DO BUSINESSES NEED TO DO?
Businesses should welcome this review process as an important opportunity to shape the EC’s approach to merger review.
The EC is seeking feedback from stakeholders, including businesses, on how they expect the EC to conduct its merger analysis in the future—including the scope and treatment of efficiencies, the potential use of presumptions in deciding what to review, and the role of broader policy considerations. These responses and the new guidelines will in the future guide the EC in deciding whether a merger is ultimately harmful for competition.
The results of the consultation will show how supportive the market participants and other private and public stakeholders will be to the consultation process, and the aims of the EC. While the new framework intends to encourage innovation, investment, and provide legal certainty in the merger control area, in doing so it should keep the analytical framework simple and competition-centric and avoid increasing the evidentiary burden on the notifying parties.
Businesses planning to respond should consider engaging external EU competition counsel early to ensure their internal submissions are targeted, well-informed, and that any internal documents created in connection with the consultation can be protected from potential future disclosure as legally privileged.
The consultation is open until September 3, 2025.
THE SCOPE OF THE REVIEW
The review covers both the Horizontal Merger Guidelines[1] and the Non-Horizontal Merger Guidelines[2] (together, the Guidelines), which were published respectively in 2004 and 2008. The main drive behind the review is to take on board the significant changes that have shaped today’s European and global economy in the last 20 years, and to reflect the several transformational changes that the EC is facing in its merger review processes. The consultation is not to shape the European economy but instead to reflect the changes in the economy in the new Merger Guidelines.
While addressing the European Parliament, Commissioner Teresa Ribera defined this project as “comprehensive and ambitious” and “a unique opportunity to modernise” the European Commission’s current merger review process, to take into account “disruptive changes in our societies and our economies over the past 20 years, such as digitalisation” and “ensure that innovation, resilience, and the investment intensity of competition are given adequate weight in light of the European economy’s acute needs.”
This review may determine a significant shift in the EC merger review processes, as it will consider transformational changes in the economy that happened in the past two decades. The new guidelines are expected to reflect the principles presented in Commissioner’s Ribera Mission Letter, for a “Clean, Just and Competitive Transition”; the most recent EC Political Guidelines, which call for “a new European Prosperity Plan to … put research and innovation at the heart of [the] economy, boost productivity … invest massively in … sustainable competitiveness”; the 2025 EU Competitiveness Compass, which provides a “new roadmap to restore Europe’s dynamism and boost … economic growth”; and the Draghi report on EU competitiveness, which raised the question as to “whether vigorous competition policy conflicts with European companies’ need for sufficient scale to compete with Chinese and American superstar companies”, ultimately causing a lack of innovation, and for “radical changes to the current way competition policy is enforced” and that new Guidelines are required to “make the current Merger Regulation fit for purpose”.
The EC highlighted the broadness and significance of this review in its press release, which states that “[t]he aim of the guidelines is to provide a comprehensive, predictable, and lasting framework … [To] offer a refreshed yet legally and economically sound, predictable, and evidence-based analytical framework, for all types of mergers and all economic sectors.”
Two Parallel Consultations
The review consists of two parallel consultations:
- A high-level “General Consultation”; and
- A “Targeted Consultation” on seven topics relevant for merger review, which the EC presented in separate papers.
The General Consultation
The General Consultation notes that competitive dynamics within and outside the internal market have changed significantly since the adoption of the Guidelines. The aim of the review is to ensure that merger control remains “sharp and up-to-date”, and “flexible enough to allow the Commission to protect competition under the Merger Regulation in evolving modern market realities”. The overarching principles guiding the new Guidelines are transparency and predictability for businesses.
The General Consultation consists of an online form, split into three parts:
- In part one, the EC collects feedback on the effectiveness and efficiencies of the current Guidelines, and the relevancy and coherence of the principles there established.
- In part two, the EC collects feedback on how it should assess elements such as increase in scale, security of supply and resilience, innovation, investment, and consolidation in strategic sectors, when such elements are relevant to the merger review.
- In part three, the EC collects feedback on how it should assess market power and other market features, and on the structural indicators that would be best suited to evaluate the impact of a merger on competition; it also asks questions on how the EC should evaluate specific aspects, such as innovation, sustainability, digitalisation, and efficiencies, and asks questions on how matters such as public policy, defence and security, and the labour market shall be dealt with in the new Guidelines.
The Targeted Consultation
The Targeted Consultation focuses on seven specific and technical parameters that are relevant to the EU merger control process: (1) competitiveness and resilience, (2) assessing market power using structural features and other market indicators, (3) innovation and other dynamic elements in merger control, (4) sustainability and clean technologies, (5) digitalisation, (6) efficiencies, (7) public policy, security and labour market consideration.
Each parameter is introduced in detail in a separate paper, which contains the following main arguments:
- Competitiveness and resilience: The EC clarifies that productivity and competitiveness are one of the Commission’s key priorities. In this context, the EC recognizes that scale—when reached through mergers that do not confer a dominant position to the merged entity—can boost productivity through geographic expansion, heightened investments, and innovation. At the same time, these mergers can help resilience by guarantying integrated supply chains within the EU Single Market, which in turn can reduce dependency from extra-EU sources. All these factors can help European companies to compete on a global scale.
- Assessing market power using structural features and other market indicators: With this paper, the EC seeks feedback on ways to assess market power, e.g., by adopting stricter indicators, potentially shifting the burden of proof to the merging parties to demonstrate that certain concentrations are not harmful or considering different elements such as diversion ratios or profit margins. The potential introduction of a rebuttable theory of harm (similar to the US) would likely apply to certain share thresholds. However, the proposal of such a shift would (if implemented) raise important legal questions as to who ultimately has the burden of proof under EU law. The EC will also consider updating its guidance on the framework to assess the coordinated effects of a merger, and on whether the “ability-incentive-effects” framework is still appropriate to evaluate vertical mergers.
- Innovation and other dynamic elements in merger control: The EC opens this paper clarifying that “innovation plays a fundamental role in strengthening Europe’s competitiveness and competition is a key driver of innovation”. The EC then stresses the importance of adopting guidelines that ensure the correct assessment of both positive and negative effects on innovation that a merger can bring about, recognizing that mergers shall be approved when they may facilitate a faster entry of new products on the market, while it seems that the EC will retain the view that “killer acquisitions” remain likely to raise competition concerns. Overall, this paper—more than the others—shows the EC commitment to start evaluating the possible dynamic effects of mergers in the medium and long run, as opposed to limiting its analysis to the short-run effects of mergers on prices.
- Sustainability and clean technologies: The EC explains that merger control must play a role in allowing transactions that promote clean innovation and the objectives of the Clean Industrial Deal, and is an example of the EC considering using the merger review process to reflect its wider policy objectives. On the other hand, the EC is likely to prohibit mergers that eliminate disruptive innovators in sustainability. Most importantly, the EC recognizes that “the clean transition is resulting in the emergence of new demand and supply patterns and is having a transformative effect on the economy”; this suggests that the interplay among competition, innovation and sustainability will be given adequate consideration in merger review processes. This reflects recent merger decisions in which while claims with respect to improved recycling were not ultimately accepted, they were considered by the EC.
- Digitalisation: The EC recognizes that the fast-paced nature of digital markets requires a particularly forward-looking approach in merger investigations. The EC also notes that mergers in digital markets are often characterized by “killer acquisitions” of nascent competitors, and these markets present unique characteristics such as “winner-take-most” dynamics, “tipping” in favour of one dominant player, the existence of ecosystem and network effects, and customer inertia. The EC is seeking feedback on how these elements shall be considered in merger reviews.
- Efficiencies: In this paper, the EC restates the current framework for the evaluation of efficiencies, which must benefit consumers, be merger-specific, and be verifiable. Interestingly, the EC seems open to consider out-of-market efficiencies, when such efficiencies benefit “substantially the same customers otherwise harmed by the merger”. This may be especially relevant for mergers that may restrict competition in a certain market, but overall enhance consumer welfare by, e.g., adopting methods of production or putting on the market products that are more sustainable.
It is worth nothing that the EC here recognizes that no merger has so far been cleared exclusively on the basis of efficiencies arguments alone. However, in this paper the EC seems more open to accept efficiencies arguments where there is a complementarity between the activities of the merging parties in the future, and—more notably—it seems interested in understanding how they should assess any time asymmetry that could arise from a merger—that is, how they should assess a merger that could cause immediate harm to consumers, but likely generate efficiencies in the future. While the paper only mentions the telecom sector as an example of a sector where parties have been able to put forward relevant efficiencies arguments, this does not mean that the EC will not be more open to accept efficiency arguments in mergers related to other sectors, provided that any argument can be sufficiently supported by data and internal documents.
- Public policy, security and labour market considerations: The EC recognizes the role of competition in the pursuit of other policies. By limiting market concentration, merger review processes can ensure balance between private and public sector, e.g., by avoiding the creation of “too-big-to-fail” companies or harmful monopolies. The EC also concedes that further consolidation in the defence sectors could help enhance the European Defence Union project, whereas further concentration in the media sector—especially in the AI space—may hinder democracy and consumer choice. Finally, the EC proposes to include guidelines on the effects of mergers in labour markets, specifically to avoid monopsonies that can lead to worse labour conditions for workers. This paper reflects the increased interaction between merger control and wider policy aims.