The draft is open for public comments until 26 June 2026. The Commission has indicated it could finalise revised guidelines later in 2026. But Commissioner Ribera has made clear that officials are already applying the new approach to live cases – meaning the practical effect is immediate.
In parallel, deal teams should watch other concurrent reform processes: the revised Antitrust Procedural Framework is expected later in 2026, and the planned Competitiveness Coordination Tool remains a space to monitor.
Authors: Bernd Meyring, Neil Hoolihan, Lodewick Prompers, Elisha Kemp, Jordan Lipski
The European Commission is revising its merger guidelines after more than 20 years. The draft for consultation marks a step towards Draghi’s calls for a revamped competition policy. It may not incorporate every change stakeholders have sought (see overview below). But, it’s clear transactions that deliver on priority areas (notably investment/innovation, sustainability, resilience and European defence readiness) are likely knocking at a more open door than before, even where resulting “concentration” levels are high by traditional benchmarks.
These reforms don’t exist in a vacuum. As we explored in our blog post on the EU’s competitiveness and resilience strategy, the push to build European firms capable of competing globally is reshaping competition policy across a range of instruments. But how far does the draft really go, and how much will change in practice?
In this blog post, following on from our webinar (see here), we explore what the guidelines propose, how they support the EU’s broader competitiveness agenda, and what this means for deal planning.
Efficiencies: an expanded approach to benefits – and harm
The heart of the reforms, and the loudest answer to Draghi’s call, are the changes to efficiencies. Scale, innovation, investment, resilience and sustainability, are to be given ‘adequate weight’ when assessing a merger, and ‘dynamic’ efficiencies – those that incentivise investment or innovation, rather than just creating direct cost savings or quality improvements – will be given due consideration. This broader range of efficiencies can offset the harm to competition brought by a merger, opening the door to combinations that may have historically struggled to get clearance.
Efficiencies reforms are unlikely to be a bright green light for deals, but rather the instructions to a complex puzzle with moving pieces, requiring parties to assemble and put forward evidence early and comprehensively, if they plan to launch an efficiencies defence.
Industrial policy: rhetoric or revolution?
Recognising the opportunity for a larger and wider focus on efficiencies, and echoing mandates from Commission President von der Leyen’s competitiveness agenda, the Competitiveness Compass and the Mission Letter to Commissioner Ribera throughout the draft, the Commission appears to be opening the door to broader ‘industrial policy’ types of arguments.
That said, the Commission still clearly intends to preserve the primacy of competition analysis and keep markets competitive – not pick winners. Industrial policy considerations enter merger assessment only through the lens of competition law rather than as freestanding justifications:
The legal test is unchanged: the Commission still assesses whether a merger significantly impedes effective competition (‘SIEC’).
Efficiency claims (while the standards appear broader than before) will be rigorously scrutinised: both direct and dynamic efficiencies must be verifiable, merger-specific and benefit consumers. The company must not only assert but prove them convincingly. And a merger likely to cause significant harm is unlikely to produce efficiencies sufficient to outweigh that harm. Nonetheless there appears an increasing openness to consider demonstrated efficiencies and balance them in a more workable trade-off.
The parameters of competition are deliberately contained: resilience, innovation and sustainability only enter the analysis “to the extent they are relevant for the competitive process,” not as freestanding industrial policy goals.
The newly appointed Director-General, Anthony Whelan, has been explicit: merger review “remains essentially an economic activity.” What is new is that geopolitics has become “an economically relevant factor” – meaning it enters the analysis insofar as it affects conditions like resilience and security of supply, not as a political justification for approving or blocking a deal. This gap between political rhetoric and legal reality deserves close attention.
Read carefully, the draft gives the Commission more discretion – tools for significant change but also for intervention – and we expect a transaction that ticks the right boxes will face a more receptive ear given the now explicitly acknowledged policy drivers.
Innovation efficiencies. Assess innovation-enhancing efficiencies (e.g. R&D synergies, pipeline evidence, patent quality) within merger review, including evidentiary standards and merger-specificity requirements.
The draft recognises dynamic efficiencies, including combining complementary R&D assets to develop new or improved products. It expressly addresses innovation-related factors such as R&D expenditure, patents, pipeline products and track record.
2
A new innovation defence. Allow merging companies to justify an otherwise anti-competitive merger by demonstrating that the merger would enhance innovation, even if it reduces competition in traditional ways.
No blanket innovation defence. However, the draft recognises dynamic efficiencies covering a variety of innovation-related factors. A new “innovation shield” also provides a safe harbour for acquisitions of small innovators (including start-ups) or R&D projects where certain criteria are met.
3
Efficiency defence reforms. Create more room and flexibility for allowing mergers that risk harming competition to be cleared where parties prove efficiencies.
Expanded scope, but keeping the conditions of verifiability, merger specificity and consumer benefits. The draft recognises fully, and elaborates amply on, dynamic efficiencies and adapts the conditions to accommodate such efficiency claims (e.g., time horizon, degree of allowed uncertainty and quantification).
4
Sustainability factor. Consider sustainability-related efficiencies (e.g. green investments, environmental benefits) as part of merger assessment, potentially beyond short-term price effects.
Sustainability is recognised as a parameter of competition with some flexibility beyond short-term price effects; albeit still tethered to the competitive framework.
5
Potential entry. Guidance on assessing whether potential/nascent competitors (not yet fully active) would enter and constrain competition, and how their elimination affects merger outcomes.
Detailed guidance. A merger between an incumbent and a potential competitor may lead to a SIEC where: actual competitors do not effectively constrain the incumbent; the potential competitor already or foreseeably does so; and no other potential competitors could sufficiently do so post-merger. Entry as a countervailing factor must still be sufficiently likely, timely and of sufficient magnitude.
6
Resilience considerations. Treating resilience (shock-resistance, supply continuity, strategic autonomy, network reliability) as a factor in merger assessment.
Resilience features in both theories of harm and benefit. Relevant factors include security of supply chains, critical infrastructure and defence readiness. The draft expressly welcomes scale-enhancing mergers that boost European resilience; mergers that reduce resilience can ground a SIEC finding.
7
Non-horizontal lighter treatment. Whether vertical/conglomerate mergers should generally face lighter scrutiny, using ability-incentive-effects frameworks and presumptions of lower risk.
No lighter treatment. If anything, the framework is more detailed than before. The draft sets out a comprehensive ability-incentive-effects framework and introduces “diagonal mergers” as a new category, treated with scepticism on efficiencies. It expressly addresses dynamic foreclosure incentives, particularly in markets with network effects, data accumulation or control of bottlenecks.
8
EU competitiveness and scale. Consider whether mergers enable EU firms to achieve global scale and compete with US and Chinese rivals, particularly in strategic sectors.
The draft acknowledges that mergers can help companies develop scale needed to compete in global industries with high capital intensity and rapid R&D cycles. Scale is positive (no “big is bad”), but market power is not. Competitiveness cannot override a SIEC finding – particularly where global markets are not a relevant factor.
9
Public policy and labour markets. Consider labour market effects (monopsony power, wages, working conditions) and broader policy aims within merger assessment.
Labour markets are formally recognised as purchasing markets. A merger creating monopsony or oligopsony power can constitute a SIEC, potentially resulting in lower wages or worse conditions. However, the Commission limits its analysis to competitive effects on labour markets – restructuring effects unrelated to a loss of competition fall outside its remit.
10
Digital mergers. Create specific rules for assessing mergers in digital markets, including guidance on dynamic competition, network effects and data accumulation, ecosystem theories of harm, innovation and killer acquisitions, non-price parameters and multi-sided platforms.
Comprehensive digital coverage is embedded throughout the general framework rather than in a standalone chapter. Network effects, multi-sided platforms, ecosystems, data accumulation and entrenchment all feature as potential theories of harm. Killer and reverse killer acquisitions are named and covered within the loss of innovation competition theory. The innovation shield provides a counterbalancing safe harbour for acquisitions of small innovators or R&D projects.
The proposed refresh of EU merger control – Here’s what you need to know