Seven detailed papers on critical "focus" topics

A. Competitiveness and resilience

The paper on competitiveness and resilience[5] introduces a resilience risk assessment framework to evaluate supply chain vulnerabilities, driven by lessons from COVID-19 and the Russia-Ukraine conflict. Mergers affecting critical inputs are suggested to face intensified examination to ensure they do not compromise supply chain stability.

Another important point is, however, the stressing of the need to keep up with technological developments by adapting an approach to support start-ups and scale-ups. 

Implications? Businesses should prepare for increased scrutiny of mergers affecting critical supply chains, with a focus on resilience metrics.

B. Assessing market power

In the paper on assessing market power[6], the EC is proposing significant reforms to how it assesses market power in merger reviews, responding to rising industry concentration and resulting rising prices across the EU over the past many years. These changes aim to better protect consumers from price increases whilst maintaining competitive markets.

The most significant proposed change involves introducing stricter structural indicators or "rebuttable presumptions" that would shift the burden of proof to merging companies. Under this system, certain mergers - particularly those involving dominant firms or creating high market concentration - would be presumed harmful unless the parties provide compelling evidence to the contrary. This represents a fundamental shift from current practice, where the EC must prove harm, creating a counterbalance to existing "safe harbours" that protect low-risk mergers.

The EC also proposes alternative metrics for assessing market power, moving beyond traditional supply shares to include capacity shares, diversion ratios, profit margins, spare capacity, and a firm’s “pivotality” (its ability to influence market outcomes). Additionally, the paper seeks to clarify when merging firms are close competitors or when a merger eliminates an important competitive force.

Implications? Companies should likely gear up for a more rigorous merger review environment and prepare for robust evidence to rebut presumptions, particularly in concentrated markets where high market shares or concentration levels trigger presumptions of harm, requiring evidence to demonstrate pro-competitive effects.

C. Innovation and dynamic competition

The EC is reforming how it assesses innovation and dynamic competition in mergers, recognising that firms compete through long-term R&D investments, not just pricing. The reforms aim to give innovation "adequate weight" whilst developing frameworks that can evaluate both positive and negative merger impacts on innovation.

This paper on innovation and dynamic competition[7] proposes a four-layered framework for assessing innovation in mergers covering: overlaps between existing products, advanced pipeline products, potential discontinuation of early-stage research, and structural reduction in overall innovation levels.

The framework aims to address “killer acquisitions” (where large firms acquire promising competitors to discontinue their products) and “reverse killer acquisitions” (where the acquirer stops its own R&D projects post-closing), particularly in pharmaceuticals and tech.

A key issue is crafting an accurate “counterfactual” to predict post-merger innovation outcomes. The EC seeks to clarify the distinction between future rival entry as a pro-competitive factor and the elimination of a potential competitor as a harm. It also explores the competitive impact of “perceived entry,” where a firm’s behaviour is constrained by the mere possibility of a rival’s entry, even without concrete plans.

Implications? Companies in innovation-intensive sectors must demonstrate how mergers enhance rather than diminish innovation incentives. The burden is particularly high when acquiring nascent competitors with promising technologies. The framework aims to prevent harmful consolidation whilst recognising legitimate innovation synergies that accelerate technological development and benefit consumers.

D. Sustainability and clean technologies

This paper on sustainability and clean technologies[8] looks into the possibilities of reforming merger control to support the EU's climate neutrality ambitions whilst preventing transactions that harm clean innovation, hereby recognising that merger control must balance protecting competition with facilitating the clean transition and supporting investment in sustainable technologies.

A key concern is preventing harmful acquisitions where incumbents buy disruptive green innovators to slow or eliminate clean technologies. The EC aims to identify when mergers reduce incentives to invest in green products or create barriers to accessing clean technologies, potentially hampering sustainability. However, the EC acknowledges that interventions in mergers only on public policy grounds unrelated to competition are not feasible.

Implications? Companies might benefit from highlighting sustainability benefits in merger filings, while those active in high-emission industries should prepare to address potential negative environmental impacts. 

E. Digitalisation

Digital markets pose unique challenges due to their complex, interconnected nature. This paper on digitalisation[9] notes that digital mergers often blur the lines between horizontal, vertical, and conglomerate transactions, complicating traditional assessments. The EC introduces “ecosystem theories of harm,” focusing on how mergers can entrench or leverage digital ecosystems, as seen in recent tech cases. However, replacing traditional foreclosure tests with broader ecosystem entrenchment analyses may spark debate over legal certainty.

The paper acknowledges the growing role of privacy and data protection in merger reviews, with data access often being central to competitive dynamics. The EC seeks stakeholder input on whether revised guidelines should explicitly list privacy as a competitive parameter.

Implications? Tech firms must anticipate rigorous ecosystem analyses, particularly for acquisitions that could strengthen platform dominance. 

F. Efficiencies

In practice, it is very rare to get a merger approved by the EC exclusively based on efficiencies offsetting harm.

In this paper on efficiencies[10], the EC addresses challenges in evaluating efficiencies, and thus introduces a three-part cumulative test for efficiency claims. 

First, efficiencies must benefit consumers - intermediate and ultimate consumers must not be worse off. Variable cost savings are more likely to be passed on than fixed costs, and competitive pressure must remain on the merged entity. Innovation efficiencies like new products are assessed through consumers' willingness to pay. Efficiencies must materialize within a reasonable timeframe (typically 3-4 years) and be substantial enough to outweigh competition harm.

Second, efficiencies must be merger-specific - they must result directly from the merger and cannot be achieved through less anticompetitive alternatives like licensing agreements or joint ventures. Alternatives must be reasonably practical given industry practices.

Third, efficiencies must be verifiable - the EC must be reasonably certain they will materialize. Where possible, efficiencies should be quantified, otherwise there must be a clearly identifiable positive consumer impact. Merging parties bear the burden of providing evidence including internal documents, management statements, historical examples, and expert studies.

Implications? Merging parties must provide verifiable, merger-specific efficiency claims, potentially including qualitative evidence for sustainability benefits. Clearer guidance could facilitate approvals for pro-competitive mergers with strong efficiency justifications.

G. Public Policy and other considerations  

This paper on public policy, security and labour market considerations[11] explores how EU merger control intersects with broader public policy objectives beyond traditional competition concerns. While the EU Merger Regulation's primary mandate is to prevent significant impediments to effective competition, merger control also indirectly supports wider societal goals by limiting market concentration and preventing companies from becoming "too-powerful-to-care" or "too-big-to-fail."

Implications? While the EC cannot directly block mergers on non-competition grounds, these considerations may influence the underlying competitive assessment. Merging parties should anticipate addressing concerns about labour market effects, particularly in concentrated markets where workers have limited employment alternatives.