As part of our response to the European Commission’s consultation on possible reforms to its merger control guidelines,[1] we provided our views on Topic Paper A – Competitiveness and Resilience.
We offered suggestions on how the merger guidelines might be adapted to reflect new market realities by giving greater weight to dynamic competition, scale-related efficiencies, resilience benefits, and global competitive pressures, while maintaining rigorous, evidence-based enforcement that preserves legal certainty and effective competition.
A. Key Considerations
We identified four areas where the merger guidelines could be refined to support Europe’s competitiveness and resilience.
- Scale and global competitiveness. Scale is increasingly a prerequisite to remain competitive, especially in sectors characterized by high fixed costs or fast innovation cycles. Yet the current framework of assessment focuses heavily on static indicators such as market shares, and risks overlooking the procompetitive effects of scale such as enabling EU firms to compete globally, fund costly R&D, withstand market disruptions, and invest in long-term projects critical for the green and digital transitions.
- Resilience of value chains. Recent crises have revealed the fragility of critical supply chains. Merger review currently rarely accounts for the resilience benefits that consolidation can bring such as securing access to key inputs, enabling vertical integration or diversifying sources of supply.
- Innovation and investment. Mergers can unlock the scale, capital and expertise needed for ambitious investments in R&D, sustainability and infrastructure. Yet these benefits are often long-term, uncertain and non-price in nature, and are currently rarely considered.
- Global structural asymmetries. European firms increasingly compete with rivals benefiting from foreign subsidies, lower regulatory burden, or privileged access to capital and raw materials. These asymmetries have a significant impact on competitive dynamics, but are not captured by traditional market indicators such as EU market shares.
B. Our Proposals
Any revisions to the merger guidelines would need to strike a balance between protecting competition and enabling growth. In particular, we believe the revised guidelines would need to:
- Maintain rigorous safeguards against genuinely anticompetitive mergers;
- Acknowledge and consider merger-specific benefits – particularly with regard to scale, innovation and resilience – when they are credible, evidence-based, and procompetitive;
- Give appropriate weight to forward-looking evidence and dynamic competition; and
- Recognize global asymmetries to ensure EU firms are not at a lasting disadvantage compared to rivals.
To address this challenge, we propose the following refinements:
| Market definition & dominance | Adopt a more flexible, forward-looking approach to market definition, recognising dynamic competition in fast-moving and innovation-led sectors. This means considering emerging competitors, disruptive technologies, and cross-border constraints. |
| Efficiencies & synergies | Provide clearer guidance for assessment of merger-specific efficiencies, especially those linked to scale, innovation, and sustainability. The evidentiary threshold should be more practical, allowing well-supported business evidence to demonstrate likely benefits. |
| Resilience metrics | Recognise resilience as a relevant procompetitive benefit. The revised guidelines should introduce assessment criteria considering factors such as supply chain robustness, risk of disruption, and the ability to maintain critical inputs or services in adverse conditions. |
| Counterfactual & balancing | Ensure counterfactual scenarios are realistic and grounded in commercial evidence, for example in situations where a target may struggle to survive independently. The assessment should weigh potential static harms against credible longer-term dynamic benefits. |
| Global context considerations | Allow merger assessments to take account of structural disadvantages faced by EU firms where a transaction could help offset these without undermining effective competition. |
C. Conclusion
As the European Commission reviews its merger guidelines, the challenge is to preserve the rigorous competition enforcement that has served Europe well, while adapting to a global environment where scale, innovation, resilience and structural asymmetries critically affect firms’ ability to compete.
Properly framed, we believe the revised guidelines can support not only competitiveness, but also sustainable growth and resilience across Europe, benefitting consumers, businesses, and society as a whole.
Interested in reading our full response? Please find it here.
[1] See our September 5 alert EU Merger Guideline Consultation – Our Views on Possible Reforms, available on the Cleary Antitrust Watch here.