The European Commission is trying to update merger control for an economy shaped by technology, global competition and industrial-security concerns. Dealmakers say the result is still unclear.
The European Commission’s attempt to modernise EU merger control has opened a new debate over whether Brussels is prepared to tolerate larger European companies in the name of competitiveness, or whether its traditional competition-enforcement model will continue to dominate major deal reviews.
The issue has sharpened after European dealmakers warned of uncertainty over the direction of EU merger policy, despite the Commission’s publication of new draft merger guidelines designed to reflect market realities that have changed significantly since the current framework was adopted. The concern is not merely technical. It goes to the heart of Europe’s industrial strategy: whether the bloc can build companies with enough scale to compete globally while still preventing excessive market concentration.
The Commission opened its review of the EU merger guidelines after nearly two decades of using separate horizontal and non-horizontal merger frameworks. The draft text, published for consultation on 30 April, is intended to replace the 2004 horizontal merger guidelines and the 2008 non-horizontal guidelines with a single consolidated document. The consultation is open until 26 June.
At one level, the move reflects a long-standing complaint from parts of European industry: that merger control has been too narrowly focused on price effects and too cautious about allowing companies to gain scale. That argument has become more prominent as Europe seeks to reduce dependence on foreign suppliers, strengthen its technology base and respond to competition from the United States and China.
The draft guidelines appear to give more space to arguments based on innovation, resilience, investment and scale. Legal analyses of the draft note that it places greater emphasis on efficiencies and allows merging companies to argue that a transaction could support competitiveness, innovation or supply-chain security. However, those arguments must still be supported by evidence, and the Commission retains broad discretion in assessing whether claimed benefits are credible and likely to offset harm to competition.
That is where the uncertainty lies. The Commission’s political leadership has repeatedly linked industrial scale to Europe’s ability to compete globally. At the same time, the competition directorate remains legally bound to prevent mergers that would significantly impede effective competition in the internal market. For companies, investors and legal advisers, the question is whether the new language will materially change case outcomes, or simply widen the range of arguments without reducing regulatory risk.
This matters most in sectors where Europe already faces pressure to consolidate, including telecoms, technology, energy infrastructure and advanced manufacturing. In telecoms, operators have long argued that fragmented national markets weaken investment capacity and delay network upgrades. Competition authorities, however, have often been wary that reducing the number of operators could raise prices or weaken consumer choice. Similar tensions arise in digital markets, where scale may support research and development but also risk reinforcing dominant ecosystems.
The debate is not one-sided. Earlier this year, a group including Ireland, Finland, the Czech Republic, Estonia and Latvia warned against relaxing EU merger rules, arguing that existing rules already allow European champions where deals are supported by economic evidence. Their position reflected a concern that size alone should not be treated as a public-interest objective, and that supply-chain resilience may be better addressed through industrial policy rather than weaker competition scrutiny.
For Brussels, the political difficulty is clear. If the Commission continues to block or heavily condition large European transactions, it risks criticism that competition policy is out of step with the bloc’s competitiveness agenda. If it moves too far towards permissive consolidation, it risks undermining one of the EU’s strongest regulatory tools and exposing consumers, suppliers and smaller firms to more concentrated market power.
The revised merger guidelines therefore represent more than an administrative update. They are a test of whether the EU can align competition law with industrial strategy without turning merger review into political bargaining. Dealmakers are unlikely to be reassured by broad references to resilience and scale unless those concepts are applied consistently in future cases.
For now, the Commission has opened the door to a wider set of arguments, but it has not removed the central uncertainty facing companies planning major transactions. The real test will come not in the wording of the final guidelines, but in the first controversial merger decisions taken under the new approach.
