On April 30, 2026, the European Commission published a long-awaited draft of updated Merger Guidelines. Stakeholders have until June 26 to provide their feedback via an online survey. The Commission’s dedicated page on this initiative provides further details.
The revamp of the guidelines is an attempt to reflect what the Commission has learned since the existing Horizontal Merger Guidelines (2004) and Non-Horizontal Merger Guidelines (2008) were put in place and to update merger control practice to encompass current geopolitical realities and EU strategic priorities.
The underlying objective of the consultation draft is clear: to facilitate the growth of EU companies, strengthen their position in global markets and, where appropriate, foster the emergence of European champions within the Union.
Let’s be clear: the EU Merger Regulation itself, as amended in 2004, is not going to change. Amending that primary regulation would be lengthy and complex, and would involve both the Council (Member States) and the European Parliament as co-legislators. In mandating Teresa Ribera to carry out the guidelines review in her December 2024 Mission Letter, Ursula von der Leyen was also communicating that the primary regulation itself is not up for renegotiation.
The new merger guidelines will ultimately be adopted solely by the College of Commissioners, following public consultation and “advisory discussions” with Member States. The document will be a soft-law instrument and will have no binding “legislative” force of its own. But it is likely to be highly authoritative in practice: it will bind the Commission internally as a self‑imposed framework and will guide mergers under the EU Merger Regulation. The EU Courts will use the guidelines as a benchmark when reviewing Commission decisions.
Almost twice as long as the existing horizontal and non-horizontal guidelines combined, the draft promises greater openness to discussion on the benefits of transactions, whether in terms of technological sovereignty, the resilience of the European economy, or sustainability. Deal benefits are expected to play a “key role” in the Commission’s analysis of difficult transactions.
Parties have always had the opportunity to try to demonstrate that their merger generates efficiencies capable of outweighing its anti-competitive effects. But in practice, although the Commission has over time broadened its approach to theories of harm, it has been very reluctant to accept arguments based on efficiency gains, applying standards of proof that many consider impossible to meet. The draft guidelines specify to what extent the efficiencies associated with the merger will be able to influence the decision.
Efficiencies will still have to be demonstrated on a case-by-case basis. The Commission distinguishes between direct and dynamic efficiencies. Both have to fulfill three cumulative conditions. They must be verifiable, merger-specific, and benefit consumers. Their effects must be sufficient to durably counteract, with an equivalent degree of likelihood over time, the deal’s negative effects on competition.
The draft guidelines state that direct efficiencies result from the integration or combination of merging firms’ assets and businesses. They are the most common type of efficiency, typically deriving from cost savings or quality improvements, leading directly to lower prices, new and improved products, higher product quality or variety, and improvements in other non-price parameters of competition. Dynamic efficiencies confer the ability or increase the incentives to invest in or innovate new or improved products or services, distribution, or production.
Under the new guidelines, companies would be able to engage with DG COMP officials and put forward a “theory of benefits.”[1] Enforcers will analyze many parameters, such as price, which will remain an important metric of the impact of a transaction on competition, and long-term incentives to keep the companies investing and innovating. Companies will be able to formulate a theory of benefit and put these arguments on the table early in the process.
Benefits might be economic resilience, sustainability, or “the generation of scale effects that will reduce unit costs or facilitate the financing of necessary investments.”[2] The draft guidelines say that efficiencies may reflect the “objectives of EU policies”[3] or address market failures, such as wrongly priced “negative environmental externalities” or “security of supply” risks. By recognizing these as pro-competitive factors, the draft guidelines broaden the scope for parties to demonstrate that their deal will deliver benefits.
The guidelines will expand the regulator’s assessment of the possible benefits of a merger in terms of price, innovation, or quality over time. The Commission always starts its assessment with the information provided by the merging parties, which must be complete, correct, and not misleading.
The Commission conducts a balancing exercise to assess whether the efficiencies that meet the criteria outweigh the harm to competition that might otherwise result from the merger. The assessment of market power is central to determining whether the efficiencies claimed can outweigh the harm caused by a merger. “It is highly unlikely that a merger leading to a market position approaching that of a monopoly or a similar degree of market power, will result in efficiencies that will sufficiently outweigh the harm caused by the merger”.[4] The benefits must accrue to “substantially” the same consumers likely to be harmed by the merger. Market shares[5] have always been a solid metric of a company’s power, but the draft guidelines note that they may not always reflect a company’s power. The Commission may use other indicators of market power and may examine past customer switching or firm production increases as indicators of sensitivity to price changes. The Commission may also assess profit margins and barriers to competition.
The Commission will continue to enjoy a margin of discretion in weighing up demonstrated efficiencies against harm to businesses and consumers.
The inclusion of economic resilience as a review factor is particularly significant. Resilience is not only a broader EU policy objective but also a concrete parameter of competition, relevant to the assessment of market power, barriers to switching suppliers, and the importance attached to alternative sources of supply. This represents a major shift: for the first time, the robustness of supply chains and the security of essential inputs will be integrated into the competitive assessment itself, and will no longer be considered as contextual factors.
The draft guidelines also develop a more sophisticated approach to theories of harm. In particular, they provide for closer scrutiny of companies’ expanded product portfolios and of the potential effects of such expansion on customers. The draft guidelines also explicitly address the effects of monopsony on the labor market: in a completely new development, a merger between employers may be assessed based on its impact on workers’ wages and employment opportunities, rather than solely on downstream consumers. And for the first time, non-controlling minority shareholdings as low as 5% and the concentration of institutional ownership are considered potential competition concerns in their own right.
It is also worth noting Teresa Ribera’s intention to take into account the impact of a deal on sustainability by supporting mergers that combine technologies and enable firms to develop novel green technologies, and opposing mergers that reduce the choice of green products or prevent success in sustainability.
Ribera’s new approach will look beyond prices to better account for innovation and market resilience; officials will consider the dynamic effects of market changes over longer-term horizons; and they will consider, earlier in discussions, evidence of the potential upsides of deals.
Transactions that drive technological progress, boost R&D, and secure access to critical inputs have an easier road to EU approval.[6] However, this will be balanced against any harm to business and consumers. The draft text notes that this shield could apply to transactions where companies have limited overlap in their R&D activities below certain market thresholds.
Conversely, even where a company has no current market share, the guidelines recognize that it may nevertheless have a portfolio of innovative products capable of exerting competitive pressure. On the other hand, the continued presence of several credible innovators in the market following the merger could help clear prospects. Incentive-related risks are particularly relevant in industries where R&D plays a significant role. The new guidelines highlight the process of innovation rivalry, that is, the risk that a merger might lead two companies whose R&D activities overlap to abandon one of their projects.
Finally, the guidelines clarify the very limited circumstances in which Member States can use Article 21 of the EU Merger Regulation to intervene in deals to protect “legitimate interests”. They must clearly identify the specific risks to a fundamental interest of society that their measures intend to prevent, or the overriding reasons in the public interest that justify the measures. The Commission wants governments to “clearly state the exact reasons and provide specific evidence why they consider that their measures fulfill such objectives”. Governments can overrule the usual EU competition review for mergers to protect legitimate interests such as media plurality, public security, prudential rules, but derogations must not be misapplied to serve purely economic ends, such as the promotion of the national economy or its proper functioning.
Will the new guidelines, once adopted, allow deals to go ahead that previously could not have been cleared? We shall see. The lens and the political climate have shifted, but the fundamental substantive competitive assessment of all transactions under the EU Merger Regulation, like the regulation itself, is not going to change.
A former DG COMP official commented recently to Global Competition Review that the infamous Siemens/Alstom train merger, blocked in early 2019, would not necessarily be cleared under the forthcoming guidelines, noting that the companies would still need to bring “better facts and better remedies” and stressing that the need for concrete evidence to support those claims remains undiminished. Sage words.
[1] A theory of benefits explains how specific merger efficiencies occur and maintain or enhance effective competition, benefiting consumers. That is, it explains how the merger may lead to the merging firms profitably decreasing prices; increasing output, innovation, choice, or quality; or positively influencing other relevant parameters of competition, such as investment intensity underpinning stronger competitive behavior across multiple products or geographies, thereby offsetting, on a lasting basis, the harm to consumers brought about by the merger41
[2] Paragraph 34.
[3] Paragraph 300.
[4] Paragraph 35.
[5] In these Guidelines the Commission describes market shares as follows: ‘low’ for shares under 10 %, ‘moderate’ for shares ranging from 10 % to just under 25 %, ‘material’ for shares ranging from 25 % to just under 40 %, ‘high’ for shares ranging from 40 % to just under 50 %, and ‘very high’ for shares of 50 % or more.
[6] Paragraph 15.
Author: Anne MacGregor
