The Draft Guidelines are published against the backdrop of an ongoing debate on whether EU merger control adequately supports European competitiveness. That debate was triggered by the prohibition of the Siemens/Alstom merger in 2019, which drew fierce (political) criticism for blocking the creation of a European rail champion at a time of growing competitive pressure from China’s state-backed CRRC. The political fallout – crystallised in the Letta and Draghi reports – called into question whether the EU merger control framework sufficiently accounts for global competitive dynamics, supply chain resilience, and the need for European companies to achieve scale. The Draft Guidelines are the response.
The legal test remains unchanged: a concentration will be prohibited only where it would significantly impede effective competition (“SIEC”). The question is how the Commission applies that test in today’s environment.
The most notable structural change is the consolidation of the horizontal and non-horizontal merger guidelines into one integrated framework. The Commission opts for a two-sided approach. On the one hand, it gives more explicit recognition to pro-competitive scale, dynamic efficiencies, resilience, innovation and broader EU-policy objectives. At the same time, it broadens its theories of harm and introduces structured frameworks for labour markets, minority shareholdings, competitively sensitive information and portfolio effects.
Key changes
In essence, the Draft Guidelines equip the Commission with a broader analytical toolkit. The competitive assessment is now organised around eight distinct theories of harm – going well beyond the familiar trio of horizontal closeness of competition, coordination and vertical foreclosure. Theories that previously existed only in decisional practice, such as loss of innovation competition and entrenchment of dominance, are formalised for the first time. Alongside these, the Draft Guidelines break new ground on several fronts: non-controlling minority shareholdings can now independently support a SIEC finding (subject to a 5% de minimis threshold), portfolio effects are recognised as a standalone concern, and common ownership features as a relevant factor in the closeness-of-competition analysis. Also, the Draft Guidelines set out an expanded framework for assessing access to commercially sensitive information, which applies across all merger types and is no longer confined to vertical scenarios.
Dynamic competition, innovation and start-up acquisitions
Greater emphasis on dynamic competition
The Commission recognises that market shares may not capture market power in innovation-driven markets. The Draft Guidelines therefore introduce “dynamic competitive potential” as a forward-looking yardstick, assessed by R&D spend, pipeline strength, patents, access to data or technology, organisational scope, and in some cases, a high valuation relative to turnover. A zero-share firm can still be an important competitive force, while high-share firms may lack dynamic potential if pipelines are thin.
Innovation competition and start-up acquisitions
The Draft Guidelines distinguish between three scenarios for innovation harm: loss of specific innovation competition (overlapping R&D pipelines), loss of general innovation competition (overlapping innovation capabilities at industry level), and loss of potential competition (removal of a future competitive constraint by an entrant). The common thread is that the closer the parties’ innovation projects and the larger their expected market position, the weaker the incentive to innovate post-merger.
Perhaps the most notable novelty is the conditional “innovation shield” for acquisitions of small innovative companies, including start-ups. Where the parties have no overlap in the same relevant market or innovation space, the Commission will in principle allow the transaction to proceed. Even where such an overlap exists, the shield still applies if the combined market share stays below 40% and at least three independent firms with comparably competitive R&D projects remain. The practical consequences may be limited for highly concentrated R&D sectors (e.g., semiconductors, agri-tech), as the requirement of three comparable rivals may be difficult to satisfy in practice.
Efficiencies, scale and broader competition parameters
Efficiencies reframed as a “theory of benefit”
Under the previous framework, efficiencies were essentially a last resort. The Draft Guidelines aim to change that logic by introducing the “theory of benefit” as a standard part of the merger narrative, encouraging parties to proactively articulate how merger-specific synergies enhance competition from the outset, rather than waiting for a theory of harm to emerge. This is arguably the most striking conceptual shift in the Draft Guidelines.
The framework distinguishes two categories of benefits: direct efficiencies (cost savings, quality) and dynamic efficiencies (ability or incentive to invest or innovate). Both must be verifiable, merger-specific and beneficial to consumers. Consumer benefits extend beyond price to quality, choice (including media and cultural diversity), capacity, investment, innovation, privacy, sustainability and resilience (including security of supply).
Scale and competitiveness as pro-competitive parameters
The Draft Guidelines explicitly deploy scale and global competitiveness as pro-competitive parameters. The Commission “regards positively mergers that increase procompetitive scale while maintaining effective competition”, especially where multinational companies exert significant pressure. Mergers combining complementary activities across Member States without significant overlaps are viewed as contributing to market integration. This echoes the Draghi report’s call for European companies to reach global scale. The Draft Guidelines themselves temper expectations by recognising that the stronger a firm’s existing market position, the harder it will be to invoke scale arguments to secure deal clearance.
Member State intervention under Article 21(4) EUMR
Article 21(4) EUMR has long allowed Member States to take appropriate measures to protect national legitimate interests other than those assessed under the EUMR, even where a merger falls within the Commission’s exclusive competence. For the first time, the Draft Guidelines provide more detailed guidance regarding the types of measures Member States may adopt. This guidance is particularly welcome in light of the recent UniCredit/Banco BPM case, where the Commission challenged the compatibility of Italy’s golden power decree with Article 21(4) EUMR.
In the Draft Guidelines, public security, media plurality and prudential rules are expressly recognised as legitimate interests. These may be invoked by Member States without prior Commission approval. However, measures pursuing any other public interest must be communicated to, and approved by, the Commission before they are taken. In all cases, legitimate interests cannot be used to pursue purely economic interests, and national measures must be proportionate, non-discriminatory and compatible with EU law.
Practical implications for M&A
The Draft Guidelines formalise what was already emerging in the Commission’s recent practice: merger control is becoming less about preparing a notification and more about preparing the transaction itself. Parties are advised to develop a clearly articulated “theory of benefit” from the outset and to engage in efficiency talks during pre-notification, as illustrated by the Airbus/Air France merger decision.
The burden of substantiating efficiencies rests on the merging parties. Companies should build and maintain an evidence base through, for example, board materials, strategic plans and investment analyses in the ordinary course of business, so that a credible efficiency case can be assembled at pace when a transaction arises. The relevance of this approach is underscored by the Netherlands Authority for Consumers and Markets (Autoriteit Consument & Markt, “ACM“). In its response to the public consultation, the ACM stresses that early engagement on expected harms and benefits provides greater clarity to the parties and reduces the chilling effect on pro-competitive transactions. Merging parties active in the Netherlands should additionally note that the ACM has already demonstrated willingness to scrutinise non-traditional parameters of competition (e.g. in its market investigation into veterinary services for pets).
What is next?
The Draft Guidelines are currently subject to public consultation until 26 June 2026, with adoption of the final version expected towards the end of 2026 or early 2027. However, the Commission has already started to apply elements of the approach set out in the Draft Guidelines ahead of their final adoption.