The European Commission initiated a crucial public consultation to overhaul the European Union’s merger regulations. The main objective is to stimulate investment and foster innovation across the continent. The focus is primarily on the horizontal merger guidelines (HMG), which deal with mergers involving competitors within the same market, as well as companies operating at various supply chain levels.
The proposed changes revolve around seven critical areas: competitiveness, market power, innovation, decarbonisation, digitalisation, efficiencies, defense, and labor considerations. Teresa Ribera, executive vice president for Clean, Just and Competitive Transition, emphasized the importance of evolving the merger control policy. “This is a pivotal moment for Europe, and it is only by evolving that we can ensure that our merger control policy continues to serve people, drive innovation, and strengthen Europe’s resilience and leadership,” she noted.
The existing merger rules, updated over time since 2004, have faced criticism from telecoms for being too restrictive. Operators argue these rules constrain their ability to scale-up investments and hamper their global competitiveness. On the contrary, national antitrust regulators suggest that reducing the number of market players can diminish competition, elevate consumer prices, and dampen infrastructure investment. This view was echoed in a recent joint statement by regulators from Austria, Belgium, the Czech Republic, Ireland, the Netherlands, and Portugal. “The narrative that fragmentation in the electronic communications sector, hindering investment and innovation, allegedly results from unduly strict competition rules is misplaced,” stated the regulators.
This ongoing debate has become particularly relevant given the global economic instability, notably the geopolitical tensions between the USA and China, leaving Europe keen to achieve technological growth and self-sufficiency. The Commission’s president, Ursula von der Leyen, has expressed the need for a fresh competition policy approach in a letter to Ribera, underscoring the necessity to invigorate innovation and foster European competitiveness.
She urged that the revisions to the HMG should factor in Europe’s acute needs in resilience, efficiency, and innovation, while also recognizing the altered defense and security environment. In line with this, the newly announced review aims to modernize the Commission’s framework for assessing mergers’ impact on competition. As Ribera stated, “It will allow us to account for disruptive changes in our societies and our economies over the past 20 years, such as digitalisation, and enable us to ensure that innovation, resilience, and the investment intensity of competition are given adequate weight.”
