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A clear breakdown of the EU’s newly proposed merger-rule changes and what they could mean for future tech acquisitions.
On 30 April 2026, the European Commission launched a public consultation on draft new EU Merger Guidelines, with feedback open until 26 June 2026, a stakeholder workshop scheduled for 10 June 2026, and finalisation targeted for Q4 2026.[1]
The package is a consultation on guidance, not a legislative proposal to amend the EU Merger Regulation. The draft text says it has not been adopted or endorsed by the Commission, reflects preliminary Commission-services views, and would supersede the 2004 Horizontal Merger Guidelines and 2008 Non-Horizontal Merger Guidelines while continuing to operate under Regulation 139/2004.[2][1]
The practical headline is that Brussels is consulting on a new analytical framework for merger review, not on new filing thresholds or an automatic expansion of jurisdiction.[1][2][3]
The consultation package consists of the review page, the full draft Commission Communication containing the new Merger Guidelines, a Commission summary of the draft’s key technical novelties, and a section-by-section EU Survey questionnaire for comments.[1][6]
The draft consolidates the old horizontal and non-horizontal guidance into a single framework organised around market power, theories of harm, and theories of benefit.[2][3]
The operative changes are mostly substantive and evidentiary. The draft explicitly recognises non-price competition parameters including innovation, privacy, sustainability, resilience and diversity.[2][3]
The draft also adds a dedicated framework for dynamic competitive potential in markets where static market shares are weak proxies, using indicators such as R&D projects, time-to-market, patents, technological capabilities, access to data, technology or user traffic, ecosystem advantages, and valuation relative to turnover.[2][3]
The most visible startup-facing proposal is the innovation shield. In defined circumstances involving a small innovative company or an R&D project with dynamic competitive potential, the draft says the Commission in principle would not find a significant impediment to effective competition, but that comfort is conditioned on detailed thresholds and remaining-rival requirements.[2]
That shield is not a blanket startup safe harbour. The draft withholds this comfort where the acquirer is the largest firm in the relevant market or a DMA gatekeeper, which is why Reuters described the proposal as relatively startup-friendly only where big tech is not involved.[2][5]
The draft further expands explicit merger theories in areas that matter for technology markets: loss of investment and expansion competition, loss of specific and general innovation competition, loss of potential competition, ecosystem entrenchment, portfolio effects, minority shareholdings and common ownership, labour-market monopsony, and coordinated-effects risks linked to AI and algorithmic pricing.[2][3]
The same draft broadens the menu of claimed benefits by recognising dynamic efficiencies, resilience and sustainability, but it also formalises that the merging parties bear the burden of proving those efficiencies with verifiable, merger-specific evidence.[2][3]
The package also contains a less noticed but material chapter on Article 21 legitimate interests, setting out more concrete procedures for Member State interventions in EU-dimension deals.[2][3]
No primary-source material in this consultation package identifies a change to Article 1 turnover thresholds, a new transaction-value threshold, a rewrite of Article 22 referral mechanics, a rewrite of Article 4(5) referrals, or altered statutory Phase I and Phase II deadlines.[1][2][3][4]
The Commission’s own explanation is that merger guidance written in 2004 and 2008 no longer fits the economy it now polices. Its review page points to “transformational changes” including digitalisation, globalisation and decarbonisation, alongside changed geopolitical and trade conditions and the growing importance of innovation-heavy sectors and non-price competition.[1]
The Commission also frames the rewrite as a legal-certainty exercise. Its review materials say the objective is a “comprehensive, predictable, and lasting framework,” and the 5 March implementation-dialogue page says updating the assessment framework to reflect evolving case law, Commission practice and changing markets is a top priority.[1][7]
Commissioner Teresa Ribera’s public line has been consistent: broaden the assessment beyond short-term price effects, but do not loosen control indiscriminately. Reuters reported her saying on 10 March that the EU would look beyond short-term price effects “without giving companies a blank cheque for consolidation.”[10]
Reuters also reported that Ribera said current practice looks at consumer-price effects over roughly three years after a deal, and that this period may be too short in more disruptive and innovative sectors where claimed benefits may emerge later.[10]
The policy background also includes years of concern that turnover-based thresholds can miss strategically important acquisitions of firms with little revenue but meaningful future competitive significance. The Commission’s 2021 Article 22 guidance said this problem had become more common in digital markets, pharmaceuticals and businesses built around data, IP, raw materials or infrastructure.[8]
The Commission’s Article 22 Q&A put the operational point more bluntly: a below-threshold case may warrant referral where the target’s turnover does not reflect its actual or future competitive potential, and a high deal value relative to turnover can be a relevant signal.[9]
Illumina/Grail remains the key background case because it exposed both the enforcement ambition and the legal fragility of using Article 22 to reach non-reportable deals. The Commission’s own Q&A used Grail as the flagship example of a no-revenue target whose significance was better captured by expected future market position, financing raised and deal value than by current turnover.[9][12][13]
The political context matters too. Reuters reported in the immediate run-up to launch that the revamp followed calls from some Member States and companies for a more flexible approach to deals meant to build European scale and “champions,” especially through cross-border combinations.[11]
The draft absorbs some of that competitiveness agenda, but in a disciplined way. It says scale-enhancing mergers can be viewed positively, especially in global industries with high capital intensity and rapid R&D, and it specifically points to cross-border combinations of complementary activities from different Member States that do not create significant overlaps.[2]
That leaves the underlying policy compromise clear: the Commission is trying to modernise merger control for digital and AI-era competition, answer competitiveness pressure, and restore legal certainty after contentious enforcement episodes, without conceding a general presumption in favour of consolidation.[1][7][8][9][10][11]
Under the current EU Merger Regulation, a concentration has an EU dimension if either of two turnover tests is met. The higher test requires combined worldwide turnover above EUR 5 billion and EU-wide turnover above EUR 250 million for each of at least two parties, subject to the two-thirds rule. The lower test requires combined worldwide turnover above EUR 2.5 billion, combined turnover above EUR 100 million in each of at least three Member States, turnover above EUR 25 million for each of at least two parties in each of those three Member States, and EU-wide turnover above EUR 100 million for each of at least two parties, again subject to the two-thirds rule.[4]
The consultation does not propose changing those thresholds. The filing perimeter therefore remains legally the same unless a separate legislative reform is proposed later.[4][1][2][3]
Current Article 4(5) practice also remains intact. For a deal with no EU dimension but reviewable under the national competition laws of at least three Member States, the parties may request pre-notification referral to the Commission so that Brussels can handle the case centrally.[4][14]
The consultation package does not set out a new Article 4(5) mechanism. Cross-border parties can still use the existing referral route where three or more national regimes are implicated.[1][2][3][4]
Current Article 22 law allows one or more Member States to ask the Commission to review a concentration with no EU dimension if it affects trade between Member States and threatens significantly to affect competition in the territory of the requesting state or states. Since the Commission’s 2021 guidance, Brussels has said it may accept and even encourage referrals of deals that are not notifiable nationally, especially where target turnover understates competitive significance.[4][8][9]
The current consultation does not itself rewrite Article 22 practice. That means below-threshold deal risk still turns primarily on existing referral policy, while the draft guidelines would change the substantive vocabulary used if such a deal reaches the Commission.[1][2][3][8]
Current statutory timing also remains unchanged. Article 10 EUMR gives the Commission 25 working days for a Phase I decision, extended to 35 working days if commitments are offered or a Member State referral request is received, and 90 working days for Phase II, extendable to 105 working days with timely commitments plus limited further extensions or suspensions in specified circumstances.[4]
The consultation package does not alter those statutory clocks, but the broader theories of harm and benefit in the draft point toward heavier evidence demands and potentially longer pre-notification discussions in difficult cases.[4][2][3]
| Issue | Current framework | Draft consultation | What changes in practice |
|---|---|---|---|
| Jurisdictional thresholds | Turnover-based Article 1 tests | No identified change | Formal filing perimeter stays the same for now.[4][1][2] |
| Below-threshold deals | Handled mainly through national regimes and Article 22 referrals | No new call-in mechanism in the package | Risk persists, but through the existing referral architecture.[8][9][2] |
| Substantive assessment | SIEC test under older 2004/2008 guidance | Unified, more explicit treatment of dynamic, innovation, resilience, privacy, labour and ecosystem theories | The analytic playbook changes materially.[3][1] |
| Article 21 interventions | Existing legitimate-interest power with limited public guidance | Detailed procedural guidance | More predictability for national public-interest interventions in EU-dimension deals.[4][2][3] |
Low-revenue startup and R&D acquisitions are the clearest category. The draft gives some such deals a new pro-clearance route through the innovation shield, but it also equips the Commission to scrutinise them through dynamic competitive potential, innovation competition and potential-competition theories when the buyer looks like a dominant incumbent, the largest player, or a DMA gatekeeper.[2][3]
Data-rich targets could face more probing review even where revenue is low. The draft treats customer data, access to technology, user traffic, and other scarce assets as indicators of competitive significance and possible sources of lock-in or ecosystem reinforcement.[2]
Compute, cloud and AI infrastructure transactions fit naturally into the new framework because the Commission’s earlier digitalisation paper explicitly singled out acquisitions of data, technology, user traffic, talent and compute capacity, while the draft itself highlights access to key inputs, infrastructure bottlenecks, resilience and dynamic foreclosure.[15][2]
Foundation-model, model-tooling and model-distribution deals are not named expressly in the draft, but the fit is obvious. The Commission now has an explicit framework for markets where future innovation rivalry, access to data and infrastructure, ecosystem leverage, network effects and AI-enabled coordination risks matter more than present-day overlap shares.[2][3]
Acqui-hires may also face different review because labour-market monopsony is now explicit guideline text. The draft says a merger between employers may create or strengthen monopsony or oligopsony power in labour markets, with possible effects on wages, working conditions and worker mobility.[2]
Minority investments and ecosystem transactions could also draw more attention. The draft says minority shareholdings and common ownership may be a contributing factor or even a stand-alone source of a significant impediment to effective competition, which matters for strategic stakes, joint AI ecosystems and partial cross-holdings.[2][3]
Cross-border digital and AI deals that touch several national regimes may benefit from the draft’s more positive language on scale-enhancing, complementary European combinations, but they do not get relief from current referral complexity. Article 4(5) stays where it is, and Article 22 referral risk stays live for some low-turnover targets.[2][1][4][8]
| Deal type | Why review could differ under the draft | Main draft hooks |
|---|---|---|
| Startup exit / R&D acquisition | Could be easier for non-dominant buyers, harder for gatekeepers | Innovation shield; innovation competition; potential competition[2] |
| Data-rich target | Revenue becomes a weaker screen for significance | Dynamic competitive potential; data-driven lock-in; entrenchment[2] |
| Compute / cloud / infrastructure | Input control and bottleneck theories become more explicit | Barriers to entry; critical inputs; resilience; foreclosure[2][15] |
| Minority or ecosystem transaction | Partial stakes no longer sit as comfortably outside core merger analysis | Minority shareholdings; common ownership; portfolio effects; entrenchment[2][3] |
For startups, the draft creates selective relief rather than a general exit dividend. A startup sale to a smaller or mid-sized buyer may be easier to defend if the parties can fit within the innovation shield or show that enough independent rival innovation remains, but that comfort is expressly weaker where the buyer is the largest player in the market or a DMA gatekeeper.[2][5]
For acquirers, the main change is evidentiary. The draft formalises a theory-of-benefit framework and puts the burden of proving efficiencies on the parties, so board papers, investment memos, internal strategy documents, valuation work and integration planning are likely to matter even more than before.[2][10][16]
Due diligence will need to widen beyond current overlaps and market shares. In technology and AI deals, parties should expect greater focus on data assets, compute and infrastructure access, user traffic, internal innovation pipelines, hiring plans, ecosystem strategy, and any documents that portray the target as a future competitive threat.[2][16]
Timing risk may rise even without any statutory extension of Phase I or Phase II deadlines. The legal clocks are unchanged, but harder cases may require more pre-notification engagement because parties will need to develop evidence on dynamic harms, dynamic benefits, resilience, sustainability, labour effects and ecosystem issues earlier in the process.[4][2][3]
Valuation discussions may also change. A high purchase price relative to turnover is not itself unlawful, but Commission materials now explicitly treat that mismatch as a potential indicator of future competitive significance, which could complicate deals built around strategic assets rather than present revenues.[9][2]
For cross-border transactions, the package improves the language available to defend complementary European scale-up deals, but it does not simplify the filing map. Article 4(5) centralisation remains available where at least three Member States are in play, while Article 22 call-in risk remains relevant for certain low-turnover targets.[2][4][8][9]
Immediate market reaction supports that reading. Reuters said the 30 April package is likely to leave the threshold for large deals high even while allowing companies to argue more openly for sustainability, resilience, investment and innovation benefits; Reuters also reported that Vodafone welcomed the rewrite as better reflecting how infrastructure benefits materialise over time.[17]
Likely winners. If the draft survives broadly intact, the clearest beneficiaries are complementary cross-border combinations that can credibly show scale, resilience or investment benefits without removing close rivalry; smaller or mid-sized acquirers of startups and R&D assets that are outside the largest-player and gatekeeper problem set; and parties able to assemble a strong evidence file for dynamic efficiencies and innovation benefits.[2][5][17]
Likely losers. The clearest losers are dominant digital incumbents and DMA gatekeepers acquiring nascent or adjacent threats, buyers relying on low current turnover as a proxy for low antitrust significance, and investors assuming minority or ecosystem structures will sit outside the centre of merger analysis.[2][9][5]
Open questions. The main unanswered issues are how much of the current drafting survives consultation, especially the numerical thresholds and carve-outs in the innovation shield; whether dynamic competitive potential and ecosystem entrenchment can be applied predictably enough to increase legal certainty rather than just widen argument; and whether political pressure for broader jurisdictional reform later resurfaces in a separate debate, because this package itself does not amend thresholds or referral rules.[1][6][2][3]
The bottom line is narrow but important: the Commission has not launched a legislative overhaul of EU merger jurisdiction. It has launched a consultation on a new review manual that would make dynamic competition, innovation, resilience, ecosystems, labour and strategic assets much more explicit in merger analysis, while still leaving the most consequential jurisdictional questions for another day.[1][2][3][4]
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