Analysis Group Authors Explore the Future of EU Merger Review Policy
November 6, 2024
The EU’s incoming head of competition policy stands to inherit a full slate of responsibilities related to fair markets and sustainable economies. If confirmed, Teresa Ribera will step into the role of Executive Vice-President for a Clean, Just and Competitive Transition. A mission letter from European Commission President Ursula von der Leyen charges Ms. Ribera with “[modernizing] the EU’s competition policy to ensure it supports European companies to innovate, compete and lead world-wide and contributes to our wider objectives on competitiveness and sustainability, social fairness and security.” Dr. Von der Leyen specifically hinted at a review of the EU horizontal merger guidelines (HMG) and a focus on the risks of killer acquisitions.
In a blog post, Analysis Group Vice President Joshua White, Senior Analyst Claire Paoli, and coauthor Jay Modrall (Norton Rose) explore how the mission letter’s ambitious mandate might translate into merger review policy. Noting that the mission letter urges not just a reassessment of the 20-year-old HMG but “calls for substantive changes” in how the European Commission assesses mergers under EU law, the authors posit that changes to the HMG could include increasing the influence of innovation-related efficiencies when weighing a transaction’s impact on competition; taking account of the EU’s present-day security and defense environments; and giving greater weight to time horizons and investment intensities for markets with longer product life cycles, such as energy or pharmaceuticals. In addition, they mention that the commission’s “non-horizontal merger guidelines are also overdue for an update.”
Mr. White, Ms. Paoli, and Mr. Modrall also consider how Ms. Ribera may strengthen protections against killer acquisitions, in which an incumbent business eliminates potential competition by acquiring a market entrant and then terminates development of a project that threatens the incumbent’s market share.
The blog post, “Mission Impossible? Teresa Ribera’s Mission Letter and the Future of EU Merger Review,” was published on the Kluwer Competition Law Blog.