Draft EU Merger Guidelines: more tools for the Commission, new arguments for the parties

On 30 April 2026, the European Commission (“Commission”) published a draft of the revised EU merger guidelines (“Draft Guidelines”). The Draft Guidelines aim at consolidating the 2004 Horizontal Merger Guidelines for transactions between competitors and the 2008 Non-Horizontal Merger Guidelines for transactions between non-competitors into one single document. They follow a public consultation launched in May 2025, which identified seven key issues for review, including competitiveness, resilience and innovation (Noerr Insights).

No doubt, a lot has changed in EU merger control and in the world over the past 20 years. Two decades of EU case law and the emergence of new markets amidst globalisation and deglobalisation, digitalisation, decarbonisation, and new economic and geopolitical challenges have made a revision overdue.

Although the Draft Guidelines are not legislation, once adopted they will be binding on the Commission, which cannot depart from them without justification. They will also be an important reference for EU courts, national authorities and businesses when assessing transactions, the likelihood of clearance, remedies and risks of prohibition, thereby bringing greater legal certainty to all parties involved.

The key amendments and their practical implications are outlined below:

I. Background and purpose of the revision

The revision responds to a sustained policy debate. The Draghi report on European competitiveness, the Letta report on the single market and a steady stream of stakeholder input have pushed the Commission to recalibrate merger control to address the lack of productivity in the EU, and for an economy shaped by digital ecosystems, competition on innovation, vulnerable supply-chains and global rivals operating at far greater scale. The Draft Guidelines now codify two decades of case law and decisional practice, from CK Telecoms on evidential standards to Dow/DuPont and Bayer/Monsanto on innovation and Booking/eTraveli on entrenchment.

Whether transactions that were previously considered too risky will now become viable remains to be seen: the Commission’s Directorate for Competition has been very careful to manage expectations. As Commissioner Teresa Ribera put it: “If anyone thought that this call for the creation of champions was an argument to deregulate, dismantle or reduce safeguards, they are mistaken.”

II. Proposed key amendments

The Draft Guidelines are structured in three parts: Part I sets out an introduction and guiding principles. Part II contains competitive assessment aspects, covering market power, anticompetitive effects and possible benefits/efficiencies. Part III addresses measures to protect legitimate Member States’ interests.

1. A consolidated catalogue of theories of harm

The Draft Guidelines bring the assessment of horizontal and non-horizontal transactions under a single, consolidated catalogue of theories of harm. Market shares remain a key indicator across the board, but the new framework matters most in three situations: (i) deals involving a dominant party (entrenchment and foreclosure); (ii) innovation-intensive sectors (loss of innovation and potential competition); and (iii) deals with portfolio overlaps, including those involving financial sponsors (minority shareholdings, common ownership).

Practical implications: Parties will have to screen complex deals against every relevant theory of harm. The Commission also signals that it will scrutinise internal documents, board materials, deal models and prior transactions for evidence that supports (or undermines) the theory of harm. Well-planned, robust and sound document discipline from the earliest stage of deal planning becomes even more indispensable.

2. From efficiencies defence to “theory of benefit”

The Commission continues to apply the “more likely than not” (balance of probabilities) standard confirmed by the Court of Justice in CK Telecoms. The substantive efficiencies test is also unchanged: any efficiencies claimed must be merger-specific, verifiable and likely to benefit consumers, with the burden of proof resting with the parties.

What is new is procedural and conceptual. The Commission now expressly recognises “dynamic efficiencies”, i.e. benefits that materialise over time, such as enhanced ability to invest or innovate, sustainability gains or improved distribution.

Parties will be expected to articulate a coherent “theory of benefit” which the Commission must weigh against its theory of harm. The Commission, for its part, has undertaken to engage with the parties on efficiency claims early in the review, rather than later in the proceedings as an afterthought once the theory of harm has been fully developed.

Practical implications: Historically, the Commission did not accept efficiencies, and the hurdle to overcome will still be high, as the need to prove merger specificity, verifiability and pass-on to consumers still exists. However, the framing “theory of benefit” changes the process and may provide a much better opportunity for the parties to build a positive case with the same evidential discipline the Commission applies to its theory of harm (quantified where possible and supported by integration plans, synergy models and up-to-date internal documents) and to discuss it with the Commission’s case team as early as possible.

3. Scale: door-opener or roadblock

Scaling up to compete globally, securing supply chains and investing in resilience are viewed more positively in the Draft Guidelines. This is in line with the recommendations of the Draghi Report on the future of European competitiveness. The Commission is, however, careful to differentiate scale from market power and the Draft Guidelines even introduce new market-power parameters (including high profit margins as a stand-alone indicator and out-of-market constraints and imports as countervailing factors). The underlying SIEC test, however, remains unchanged.

Practical implications: Going forward, scale can either be a door-opener or a roadblock depending on the circumstances of the case and its rationale. While the Draft Guidelines show a greater openness to scale, this is not a “carte balance” for all transactions: where scale tips into market power, the Commission’s toolkit catches up quickly. Whether dominant firms, however, can profit from the new policy, remains to be seen.

4. The “innovation shield”: a quasi-safe harbour for innovation deals

The Draft Guidelines introduce an “innovation shield”, i.e. a quasi-safe harbour for acquisitions of small innovative firms or R&D projects with strong dynamic potential. Whether it applies depends on the type of overlap (existing products, R&D projects, R&D capabilities or adjacent markets) and on structural conditions including market-share thresholds and the number of independent innovators remaining post-merger. Acquisitions of start-ups benefit from a more generous regime, with a carve-out where the acquirer is neither the largest firm nor a designated DMA gatekeeper.

Practical implications: The shield is most relevant for early-stage tech, life-science and pharma transactions, including PE-backed platform builds around an R&D core. Dominant incumbents and big-tech acquirers will rarely qualify, and DMA gatekeepers not at all. For them, the parallel entrenchment theory of harm is the more likely lens. Where the shield is available, parties should address each criterion expressly in their notification.

5. Other notable additions

Member State interests (Article 21 EUMR): Although the Commission retains exclusive jurisdiction over EU-dimension mergers, Member States may intervene to protect public interests such as public security, media plurality or prudential rules. The Draft Guidelines now set out when and how Member States may do so, requiring measures to be proportionate, non-discriminatory and genuinely directed at the stated interest.

Labour markets: For the first time, the Draft Guidelines treat labour markets as a distinct dimension of competitive assessment. Mergers that create monopsony or oligopsony power over specialised workforces (think for example, life sciences or technology) may face scrutiny where the transaction is likely to negatively impact wages or working conditions.

Non-controlling minority shareholdings and common ownership. The Commission expressly addresses non-controlling minority shareholdings and overlapping ownership (common investors) as potential sources of competitive harm, for example, through information flows or aligned financial incentives. This is particularly relevant for PE sponsors with portfolio overlaps in concentrated sectors.

Practical implications: The competitive analysis will need to encompass aspects beyond classic horizontal and vertical overlaps. Politically sensitive transactions, deals in specialised labour markets and sponsor portfolios with cross-holdings all warrant broader risk screening at the structuring stage.

III. Takeaways and next steps

The Draft Guidelines mark a shift from a narrow, price-focused assessment to a more integrated one that weighs innovation, investment, resilience and out-of-market effects alongside short-term price effects.

This will hopefully cut both ways when applied in practice: the Commission has a wider repertoire of theories of harm. The parties, in turn, have recognised procedural grounds for bringing pro-competitive arguments – the “theory of benefit”, the innovation shield and a more receptive framing of scale. Three points are likely to become even more relevant for transactions than before: screening theories of harm and benefit more broadly; building the positive case (theory of benefit) early, i.e. not only as reactive defence within a given proceeding; and minding the paper trail, i.e. internal documents, board presentations, etc.

Although there is still some time, sector-specific concerns are best raised now while the text is still evolving. Stakeholders have until 26 June 2026 to comment on the draft, with a stakeholder workshop on 10 June 2026. The Commission aims to finalise its review in Q4 2026, with formal adoption expected by the end of 2026 or in 2027.