Draft of the New EU Merger Guidelines

On 30 April 2026, the European Commission published the long-awaited draft of its new Merger Guidelines for consultation (see press release). The nearly 100-page document consolidates the 2004 guidelines on horizontal mergers and the 2008 guidelines on non-horizontal mergers, together with the case law and decisional practice that have developed since then, into a single integrated text. Comments may be submitted until 26 June 2026. According to the Commission, the approaches set out in the draft guidelines may already be applied in suitable cases before their finalisation.

Background and drivers of the reform

The new EU Merger Guidelines are rooted in the ongoing competition policy debate on the role of merger control (and competition law more broadly) within the European Commission’s economic and industrial policy. Notable in this context are the Draghi Report on the future of European competitiveness from September 2024 and the Mission Letter from Commission President von der Leyen to Competition Commissioner Ribera, in which she called for greater consideration of resilience and innovation. This is politically accompanied by calls for “genuine European champions” – including from Council President Costa.

Within the Commission, there was a struggle to strike a balance between industrial policy interests and the need to protect competitive market structures. Officials from the responsible Directorate-General for Competition repeatedly pointed out that the existing guidelines did not prevent cross-border transactions – rather, the limiting factor was, among other things, an incomplete Single Market. Similar debates were conducted around the prohibition of the merger of the mobility divisions of Siemens and Alstom in 2019 and the subsequent industrial policy initiatives from France and Germany. Against the backdrop of geopolitical tensions, the experience of unstable supply chains during the pandemic, energy crises and new technologies in the digital and AI sectors, and above all Europe’s declining competitiveness, these debates have recently gained further momentum.

The new Merger Guidelines – key changes

The draft is divided into three parts: Part I addresses the guiding principles (including political “embedding”, standard of proof, counterfactual and causality). Part II explains the substantive competitive assessment of mergers (market power, theories of harm, efficiencies). Part III examines the scope and limits of taking into account the legitimate interests of the Member States.

I. Guiding Principles (Part I)

Scale-Enhancing Mergers (paras. 11–15): For the first time, the draft guidelines contain a detailed, positive assessment of scale-enhancing mergers. The Commission expressly takes a favourable view of mergers that enhance the competitiveness of European industry in global competition. In particular, it highlights mergers that enable firms to scale in global markets dominated by a limited number of incumbents, or that strengthen security and resilience (including access to critical inputs and defence readiness). However, the draft guidelines also emphasise that such beneficial economies of scale must be distinguished from increases in market power that may harm competition.

Standard of Proof and Internal Documents (paras. 26–31): Also, for the first time, the draft contains a dedicated chapter on evidence. It clarifies that the Commission bears the burden of proof for the SIEC and the parties bear it for efficiencies. An identical standard applies (“more likely than not”). The concept of a “theory of benefit” is newly introduced. This term describes a broad understanding of eligible efficiencies, encompassing not only lower prices but also improvements in innovation, product choice or quality, and similar benefits.

Practical Relevance: Contemporaneous internal documents prepared in the ordinary course of business (in tempore non suspecto) are considered particularly credible. Documents addressing the theory of harm carry high evidentiary value; however, their absence does not prove the absence of a competitive harm. Documents prepared after the announcement of the transaction have “generally limited value in terms of exculpatory evidence”. This underscores the importance of careful documentation in advance.

The Commission emphasises the margin of discretion granted to it by the European Courts in weighing divergent economic analyses and in balancing competitive harm and efficiencies. Econometric analyses can play an important role. However, the evaluation of evidence is unfettered. There is no hierarchy between quantitative and qualitative evidence.

Counterfactual (paras. 37–51): Compared to the brief mention in the 2004 Horizontal Merger Guidelines, the draft contains a significantly more differentiated framework. Generally, the conditions prevailing prior to the merger constitute the relevant benchmark. However, in appropriate cases, future expected developments may also be taken into account, for example where the market conditions prior to the merger are not representative of the market. Only in exceptional cases will an alternative merger be used as a benchmark. The failing firm defence remains subject to strict conditions (paras. 47–51).

II. Competitive Assessment (Part II): Theories of Harm

The assessment follows a dynamic, forward-looking approach. In addition to short-term competitive constraints, capabilities and incentives for future competition are examined. Market share and the concentration measure (HHI) remain indicators but are embedded in the context of the overall transaction and interpreted in principle without rigid safe harbour thresholds.

The main theories of harm comprise: loss of direct competition (head-to-head competition), loss of investment/expansion/innovation competition, loss of potential competition, foreclosure, entrenchment of a dominant position, coordinated effects, portfolio effects and effects related to access to information. New or significantly expanded are in particular:

• Loss of Innovation Competition (paras. 175 et seq.): Mergers that restrict innovation competition may lead to a significant impediment to effective competition (SIEC). For this purpose, the Commission examines both the innovation efforts of the merging parties and those of competitors (other R&D poles). Innovation competition can be restricted both with regard to specific development projects and with regard to future “innovation capabilities”. This is intended to protect innovation competition already in early pre-development phases, potentially long before the commercialisation of specific products. A merger-related loss of innovation competition must be weighed against benefits arising from the use of liberated research and development capacities in other promising areas of research.
• Innovation Shield (paras. 192 et seq.): Acquisitions of small innovative companies by non-dominant acquirers are generally unproblematic. A competitively harmful “killer acquisition” only arises where a dominant undertaking acquires an emerging competitor that could have developed significant competitive pressure. The vast majority of start-up acquisitions thus remain permissible.
• Competitive Effects in Ecosystems (Entrenchment, paras. 252 et seq.): Mergers that create or strengthen structural barriers to entry in a “core market” or across closely related markets may be harmful to competition – even without classical foreclosure. Here, the Commission reflects its practice in the Booking/eTraveli case, which resulted in a (not yet final) prohibition decision, and in Google/Fitbit.
• Access to Commercially Sensitive Information (paras. 282 et seq.): The Commission may find a SIEC in situations where the merged entity gains access to confidential business data of competitors. This may be a theory of harm both on a standalone basis or when reinforcing foreclosure or other effects.
• Portfolio Effects (paras. 287 et seq.): Increase in conglomerate bargaining power through broader product portfolios vis-à-vis buyers – even where products are not substitutable.
• Minority Shareholdings and Common Ownership (paras. 163 et seq.): Systematic consideration as a relevant factor where financial interests, influence or information flows weaken the competitive incentive of the parties involved. This will be particularly relevant for private equity investors.
• In labour markets, buyer power is recognised for the first time as a standalone theory of harm, insofar as it leads to lower wages or worse working conditions (paras. 160 et seq.). Non-competitive effects (e.g. synergies/restructuring following a merger) remain outside the scope of the assessment. Countervailing collective power (collective bargaining agreements) has a limiting effect.

III. Efficiencies: “Theory of Benefit”

The key elements of the now systematised efficiency assessment (paras. 291 et seq.) are:

• Efficiencies are an integral part of the overall assessment. A prior finding of harm is not required.
• Direct efficiencies (cost reductions, economies of scale) and dynamic efficiencies (increased investment/innovation incentives) must, as before, meet the three-prong test: (i) verifiable, (ii) merger-specific, and (iii) beneficial to consumers.
• No rigid time limit any more: In capital-intensive sectors (defence, infrastructure, energy), longer time horizons for the realization of efficiencies can be accepted.
• Scale efficiencies: Declining average costs with higher output or denser network coverage can be accepted if organic growth is not a realistic alternative.
• Resilience and sustainability efficiencies: Security of supply chains, critical inputs, and more sustainable products can be recognized.
• Out-of-market/public interest benefits are recognised only under narrow conditions; the benefitting consumers must be substantially the same consumers which would otherwise be harmed by the merger.
• Evidence for efficiencies: Internal business and integration plans as well as – carrying particular weight – external studies prepared in tempore non suspect are important pieces of evidence. For dynamic efficiencies, detailed internal assessments with short-/long-term projections and historical parallels are relevant.

Practical Relevance: The draft guidelines invite the notifying parties to submit efficiency arguments at an early stage, before formal notification, so that they can be duly taken into account. For this purpose, it is not necessary that competitive concerns have already been identified. Efficiency discussions are thus no longer an admission of competitive harm. In practice, this dialogue will become a central element of case strategy going forward. The parties should develop their concrete efficiency case at an early stage. Well-substantiated benefits of the transaction can facilitate the Commission’s clearance, even where the decision is not expressly based on them.

IV. Protection of Legitimate Interests (Part III)

Part III specifies the narrow limits on Member State interventions (public security, media plurality, prudential rules) under Article 21 EUMR. Purely protectionist measures are classified as incompati-ble with the EUMR. For intra-EU mergers, a presumption of compatibility with public security is established, whereas for acquisitions from third countries, Member States have greater latitude. EU merger control proceedings and national foreign direct investment (FDI) screening procedures are more closely and explicitly linked to each other.

Assessment: revolution or evolution?

The draft represents an evolution and not a revolution. This is already inherent in the fact that the EUMR itself remains unchanged. The draft guidelines build on the case law of the European Courts and the Commission’s decisional practice, cautiously developing them further against the background of the current competition policy trends outlined above.

Nevertheless, the draft contains substantial innovations. It is not only far more detailed than the existing guidelines but also entails significant substantive departures from them. While market structure considerations still play a considerable role, the draft places greater emphasis than before on dynamic market developments. Modern theories of harm, such as the ecosystem theories of harm or the impairment of innovation competition, are reflected in the draft. Efficiencies are given significantly greater weight and are understood more broadly in substantive terms (theory of benefit). Moreover, the draft embraces the current competition policy zeitgeist and considers scaling, “European Champions” and the strengthening of European resilience as relevant factors.

Legal certainty and predictability – the decisive benchmark for transaction practice – are, however, only partially strengthened. This is counteracted by the Commission’s broad margin of discretion in economic assessments and the weighing of evidence, including economic studies. The recognition of the allocation of the burden of proof and the invitation to an early efficiency dialogue are to be assessed positively.

Practical implications

If the draft is adopted in this or a comparable form (which is to be expected), it will have significant implications for practice in EU merger control proceedings. More so than before, the – detailed – guidelines contain a kind of “playbook” on the scope of the substantive assessment of mergers. However, they are not only the Commission’s playbook but also show the parties which topics and aspects merit greater weight depending on the case. The following aspects will be particularly relevant in practice:

• Analyse and present efficiencies early: A “theory of benefit” should not be considered only when difficulties arise during the proceedings. Rather, in suitable cases, efficiency arguments should be built up from the outset with robust, quantified evidence. Internal documents and external economic studies play a major role in this regard.
• Present the counterfactual: Where merger-independent developments (regulation, technology, market entries) are already changing the competitive landscape, a well-substantiated counterfactual can make the difference – this is particularly relevant in transformation sectors (energy, defence, telecommunications).
• Leverage the positive assessment of scale efficiencies: Mergers that combine complementary strengths across Member States and enable scaling in globally concentrated markets may be assessed positively. Particularly in the industrial, defence and sustainability sectors, this opens up greater prospects for clearance. However, it should be noted as a caveat that scaling generally requires a sufficiently large market and therefore is typically relevant only in global or at least EU-wide markets.
• Innovation Shield: For companies in the digital, tech, life sciences and other R&D-intensive sectors, the innovation shield is relevant. The Commission establishes a general presumption of compatibility for acquisitions of small innovative companies by non-dominant undertakings. The corresponding conditions (low market shares, size, sufficient alternatives) are likely to increase planning certainty for start-up acquisitions.
• Address dynamic competitive risks: The broader theories of harm (innovation, ecosystem entrenchment, data access, etc.) require more extensive risk analyses already during the due diligence phase. Internal documents on competitive proximity and strategic objectives will be scrutinised by the Commission with particular attention. At the same time, the dynamic approach also opens up the possibility for the parties to rebut potential theories of harm with robust evidence and counterarguments (e.g. market entry by competitors with relevant scale from third countries).
• Expected impact on national merger control proceedings: The Commission expects Member States to align their national reviews with the new approach of the guidelines. For transactions that must be notified in several Member States, this would increase coherence, provided national legislators and competition authorities follow this call. Whether the Bundeskartellamt will embrace the efficiency aspects in particular remains uncertain, given its past decisional practice.

In conclusion, the draft Merger Guidelines improve the prospects for clearance of complementary, cross-border mergers, of industrial, defence and sustainability mergers, and of transactions aimed at European scaling vis-à-vis global incumbents. However, the broad spectrum of potential theories of harm must be kept in mind, particularly in digital ecosystems, data access effects and labour markets. Specifically for the digital economy, the draft guidelines also tighten the review in line with current practice, by formulating theories of harm relating to the entrenchment of market power in platform ecosystems, to the loss of innovation and potential competition (including “killer acquisitions”), to portfolio effects and effects of structural links, and even to AI-assisted coordination. The intervention risk for M&A transactions in the digital sector thereby increases.

The fundamental principle remains: transactions involving large companies or narrow markets will continue to be subject to strict scrutiny. Purely political narratives without a sufficient legal, factual, and economic basis will not suffice.

Further consultation and outlook

The final new guidelines are expected around the turn of 2026-2027. Based on experience, no fundamental changes are anticipated as a result of the further consultation process. There will possibly be selective clarifications, such as on the topics of legal certainty and predictability, better operability of the evidentiary standards for dynamic efficiencies, more concrete assessment parameters for scale-enhancing mergers, the specification of acceptable time horizons in certain sectors (defence, infrastructure, etc.) and the addition of further examples, as found in the Horizontal Guidelines on the application of Article 101 TFEU.