The Draft Revised EU Merger Guidelines: Important Evolution, No Revolution

EC Response to a New Political Economy

The EC's draft Merger Guidelines arrive at a moment of strong political and economic pressure on EU competition policy. For several years, stakeholders have argued that EU merger control has been too static, too price-centric, and insufficiently attentive to the need for scale in global markets. Those concerns intensified after the Draghi report on European competitiveness, which highlighted Europe's structural competitiveness gap and called for a more growth-oriented policy framework capable of supporting investment, innovation, and industrial scale.

That broader debate forms the backdrop to the draft. So do more immediate concerns: Europe's weaker productivity growth, geopolitical fragmentation, supply-chain vulnerability, dependence on foreign technology and capital, and mounting pressure to enable "European champions" better able to compete with U.S. and Asian rivals.

At the same time, the EC has been careful to present the draft as modernization, not deregulation. Executive Vice-President Teresa Ribera has stressed that the objective remains unchanged: preserving competitive markets and preventing harmful concentrations of market power.

The Headline Change

The most visible structural change is formal. The EC proposes to replace the separate horizontal and non-horizontal guidelines with a single, integrated framework covering all theories of harm in one document.

The new text also reflects a major codification effort. Much of the draft consolidates existing decisional practice, case law, and internal analytical habits into a more organized and accessible framework.

That codification, however, does two things at once.

First, it simplifies. The sections on foreclosure and coordination, for example, compress and recast much of the older non-horizontal guidance into a shorter and more streamlined framework. That improves readability, but it also can flatten nuance and leave key concepts more open-textured than before.

Second, it broadens. The draft now elevates several theories that have historically played a more secondary role on the same conceptual level as the more widely used unilateral and foreclosure effects theories. Most notable are "entrenchment of a dominant position" and "loss of investment and expansion competition."

That broadening matters. Once codified as standard theories of harm, these concepts become easier to invoke, more difficult to dismiss as exceptional, and more likely to appear in requests for information, theories of harm, and remedy discussions.

What Is Actually New

Several sections introduce genuine analytical innovations.

• Labor Markets Enter EU Merger Control

The draft's explicit treatment of labor markets is one of its clearest innovations. The draft articulates, for the first time in EU merger guidance, a structured framework for assessing whether a transaction may lessen competition for workers.

That development aligns EU merger control more closely with recent U.S. enforcement trends, while still fitting comfortably within EU orthodoxy on buyer power. It also reflects a broader shift toward recognizing labor as an input market capable of suffering anticompetitive harm in its own right.

• Innovation Competition Gets Real Structure

The draft also gives innovation competition more structure than prior guidance. The new framework is more explicit, more disciplined, and more operational than the sparse treatment in the current guidelines.

Innovation theories have long featured in EU merger control, but often in a somewhat impressionistic way. The draft now sets out a clearer, more coherent framework for assessing whether a transaction may reduce innovation rivalry, R&D incentives, or product-development trajectories.

This section also includes one of the draft's most notable additions: a conditional "innovation shield" for startup acquisitions. In principle, the concept recognizes that acquisitions of startups can be procompetitive where the transaction enables scaling, deployment, or commercialization of innovation that the target could not achieve independently.

This is a potentially important development, particularly for venture-backed and innovation-driven transactions. But the shield is expressly conditional and likely to be applied cautiously, especially where the acquirer is dominant, controls an ecosystem, or can plausibly be accused of acquiring a nascent threat. As a result, the practical value of the innovation shield may depend less on its formal inclusion than on how demanding the EC proves to be in applying it.

• Efficiencies Receive More Structure

The draft's treatment of efficiencies also warrants attention. The relevant sections appear, at least initially, to reflect a more structured analytical framework, with echoes of the methodology used in the Horizontal Cooperation Guidelines (which describe how the EC assesses agreements between competitors).

This is a potentially useful development. The EC has long acknowledged efficiencies in principle, but in practice the doctrine has remained demanding, narrow, and difficult to operationalize.

Whether this amounts to a practical shift remains less clear. The draft's rhetoric is more open to efficiencies, but the evidentiary burden appears likely to remain high. Parties should not assume that the more elaborate framework signals materially greater receptivity absent strong internal evidence, robust substantiation, and credible merger specificity.

• Non-Controlling Minority Shareholdings

The draft guidelines introduce a structured framework for assessing non-controlling minority shareholdings and common institutional ownership as potential sources of competitive harm. This reflects an increased focus on structural links between competitors and may require financial sponsors and institutional investors to map portfolio overlaps at an early stage of transaction planning.

• Article 21 Finally Gets Real Attention

Another notable innovation is the draft's dedicated section on legitimate interests under Article 21 EUMR and related procedure. Article 21 EUMR provides that while the EC has exclusive jurisdiction to review concentrations with an EU dimension, Member States may take appropriate measures to protect legitimate interests such as public security, plurality of the media, and prudential rules.

That is a useful and overdue addition. Article 21 has long existed in the background of EU merger control, but guidance on its practical operation has been limited. The draft now offers a more structured treatment of the circumstances in which Member States may invoke legitimate interests and the procedural mechanics that apply. On the other hand, a more frequent use of Article 21 could lead to piecemeal enforcement and the loss of the benefits of the one-stop-shop for transactions.

• Sustainability, Resilience, and Competitiveness

The most politically visible feature of the draft is its repeated invocation of sustainability, resilience, competitiveness, and geopolitics. These themes now appear prominently in the draft's principles and framing.

These concepts now appear not merely as policy background, but as considerations capable of affecting competitive parameters, market power, and the broader framing of merger effects.

Even so, the practical significance should not be overstated. While the draft clearly gives these concepts unprecedented prominence, the underlying analytical framework remains incomplete and tentative.

That is most evident in the treatment of efficiencies. Although the draft repeatedly signals that sustainability, resilience, and investment may matter, it remains unclear how these benefits will be quantified, weighed, and verified in practice. The relevant provisions raise the possibility of broader consideration, but they do not yet provide a clear methodology for translating those themes into merger clearance.

The result is a draft that is ambitious in principle, but cautious in application. It remains to be seen how, beyond shaping advocacy, this will translate into concrete outcomes.

Process and Timing

The EC launched its public consultation at the end of April. Comments are due by June 26, 2026, and the EC has scheduled an interactive stakeholder workshop for June 10, 2026. Once finalized, the new guidelines will replace both the 2004 Horizontal Merger Guidelines and the 2008 Non-Horizontal Merger Guidelines, probably by the end of 2026.

For businesses, investors, and dealmakers, this consultation is worth engaging. The draft is not a radical break with the past. But it will shape how the EC reviews mergers for at least the next decade, and how much room parties have to argue scale, innovation, resilience, and strategic necessity in transactions that test the boundaries of current doctrine.