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The EU merger guidelines review – Five things we’d like to see and two pitfalls that should be avoided
The EU merger guidelines review – Five things we’d like to see and two pitfalls that should be avoided
15 September 2025
Series
Blogs
15 September 2025
The European Commission’s review of its merger guidelines presents a critical opportunity to ensure the EU merger rules and future enforcement fit a globally connected economy and best support the EU’s growth and productivity ambitions.
We recently submitted our thoughts on how the guidelines can be framed to ensure that merger enforcement policy contributes to fostering a productive and competitive Single Market. In this post, we distil our key recommendations into five priorities we’d like to see feature in the revised guidelines, and two pitfalls the Commission should avoid.
1. Recognise that scaling up can drive competitiveness
Allowing European firms to scale up can boost productivity, growth and innovation across the Single Market, without necessarily harming local competition. An effective merger control regime should acknowledge that scale can be a prerequisite for undertaking innovation and/or competing globally.
Specifically, the guidelines should explicitly address the significance of scale in markets characterised by strong economies of scale, where efficiency improvements and operational resilience can ultimately benefit consumers (for example by creating a combined entity that is better able to compete, particularly when faced with strong global competitors).
2. Take a balanced view of potential competition and innovation
The link between innovation and mergers (i.e., a change in the level of market concentration) is complex and market-specific. It is therefore important that the guidelines allow for (well-founded and evidence based) arguments around mergers enhancing innovation.
So-called ‘killer acquisitions’, for instance, may not always be harmful. In many cases, they can represent an efficient and vital exit route for innovators, creating a virtuous cycle of investment, commercialisation and value realisation. A flexible but predictable framework is needed to distinguish genuinely harmful deals (which reduce innovation levels overall) from those that bring new ideas to market more effectively and efficiently rationalise investment levels.
3. Adopt a more flexible and practical approach to efficiencies
The efficiency defence rarely succeeds, often because the evidentiary standard is too rigid and overly focused on quantifiable cost savings. The guidelines should ensure that the Commission’s assessment is rooted in market reality, allowing ‘qualitative’ efficiencies (such as enhanced innovation, sustainability and supply chain resilience) to be weighed on equal footing as ‘qualitative’ theories of harm.
The guidelines should also set out a more flexible approach on establishing efficiencies, considering when benefits to consumers in markets outside the ones where competition concerns would occur (‘out of market’ efficiencies) and taking greater account of potential benefits resulting from fixed costs reductions.
When in doubt, the Commission should give consideration to circumstances in which it may be willing to consider behavioural commitments by the parties to deliver on the claimed efficiencies (for example, if a merger is expected to enable increased investment in productive assets or greater innovation, measured through spend or employee size, the parties could commit to deliver on those metrics/promises).
4. Clarify and improve the failing firm defence
The Commission has to date applied a high evidentiary standard: merging parties must show, with near certainty, that the target would have exited the market absent the merger. The guidelines should ensure the test is rigorous but not so restrictive that it prevents pro-competitive (and allocatively efficient) solutions for businesses in distress.
The guidelines should include a more flexible approach that prioritises a forward-looking assessment of what is a probable (i.e. a “more likely than not” standard) evolution of competitive conditions if the transaction does not proceed.
5. Ensure digital market assessments are dynamic
When assessing digital markets, a static snapshot is not enough. The guidelines must encourage a forward-looking analysis that accounts for the rapid pace of technological change in digital markets and other rapidly evolving sectors.
The guidelines should encourage assessments grounded in a cogent, evidence-based analysis of how markets are evolving, over a five-year timeframe. Assessments should consider not only today’s contestability and entry barriers, but also how technological shifts (whether in artificial intelligence, data ecosystems, or new platforms) might reshape competitive dynamics. In practice, this means avoiding rigid rules and favouring flexible, context-driven analysis supported by robust evidence.
1. Presumptions of harm based on merger type or sector
The Commission should avoid introducing legal presumptions that certain categories of mergers, such as those in concentrated or digital markets, are inherently harmful. Blanket assumptions risk deterring beneficial transactions and undermining the credibility of merger review. Each case must be judged on its own merits, based on a cogent analytical framework and supported by consistent, robust evidence.
2. Enshrining niche or untested theories of harm
While merger control must evolve, the guidelines should not become a repository for novel theories of harm based on limited case examples or speculative risks. The Commission should limit its assessment to well-established theories of harm. Codifying untested ideas would create legal uncertainty, undermine predictability, and could ultimately discourage the very investment and innovation the EU seeks to promote.
By embracing a more flexible, evidence-based and forward-looking approach, the Commission can ensure that the guidelines protect competition and actively support a more dynamic and competitive Single Market. We now await with anticipation the direction the Commission elects to take, with final guidelines not expected before 2027.
In this regard it is already interesting to see that the consultation focuses as much on (arguments and data supporting) new theories of harm as it does on creating more flexibility (in particular through more room for efficiencies). Whether the final guidelines will indeed reflect a more merger-friendly framework is therefore an open question.
Until the final guidelines come out, it will be interesting to see whether merger control enforcement in individual cases starts to reflect some of the themes behind the review (as more broadly called for in the Draghi Report). If the right case is brought, backed by convincing evidence, there may well be receptive ears at the Commission.