EU Commission Publishes Draft Merger Guidelines for Public Consultation

Summary

On 30 April 2026, the European Commission published draft revised Merger Guidelines (“Guidelines”), marking one of the most significant overhauls of EU merger control in over two decades. The draft consolidates the existing horizontal and non-horizontal merger guidelines, which date back to 2004 and 2008, respectively, into a single, comprehensive framework, which is much more detailed than before. The Guidelines draw on recent case law and decisional practice, with a pronounced focus on innovation, dynamic competition and EU policy objectives as key drivers of the Commission’s assessment of mergers under the EU Merger Regulation.

By significantly enhancing the role of merger efficiencies via a new concept of “theory of benefit," and introducing other novelties such as an “innovation shield” and a newly formulated repository of theories of harm, the Guidelines aim to modernize EU merger control against the backdrop of the EU’s Competitiveness Compass to “reignite Europe’s economy,” offering new opportunities for dealmakers.

Critically, however, the Guidelines will not change the underlying law: the Guidelines are not legally binding and the EU Merger Regulation and other underlying EU legislation will remain unchanged. The burden of proof will remain on merging parties seeking to rely on the Guidelines to formulate and substantiate a “theory of benefit” demonstrating that efficiencies outweigh any potential harm of a merger to consumers.

Key Aspects of the New Guidelines

A. EU Policy Objectives as an Integral Part of Merger Control

For the first time, the Commission expressly acknowledges the relevance of non-economic policy objectives in official merger control guidance. This marks a significant departure from the traditional focus of EU merger control, which has historically focused on the economic effects of mergers.

“EU merger control supports the EU’s broader policy objectives, including the competitiveness and resilience of the internal market.”

Draft Guidelines, para. 9

These policy objectives include green innovation on competition, sustainability and net-zero, supporting a “balance of power that is essential to democratic society,” and promoting diversity and plurality of information sources and choice for EU citizens.

The Guidelines also recognize that scale-building mergers, such as the creation of European champions, can have a procompetitive impact and improve the resilience of the EU in global competition. The Guidelines seek to address the perceived gap in merger control that prevented Siemens/Alstom (2019), where the Commission blocked the creation of a European rail champion, despite strong political support and arguments around global competitiveness of a European champion.

The draft framework gives greater weight to such considerations, including the role of scale, innovation and resilience in competing with non-EU players. While it remains to be seen how these factors will be applied in practice, this new emphasis suggests that transactions previously viewed as problematic on traditional competition grounds may now have a clearer pathway to approval, provided parties can substantiate a credible “theory of benefit” aligned with these broader policy objectives.

The Guidelines require that any efficiency claimed to arise from the merger must be:

1. Verifiable and quantifiable with flexibility where quantification is not “reasonably possible,” allowing parties to demonstrate the magnitude of expected efficiencies through other means, such as internal documents, public announcements to investors by listed companies, pre-merger expert studies created independently of the merger and other third-party evidence.
2. Merger-specific, meaning that the efficiencies must result directly from the merger and could not be achieved through less anticompetitive means.
3. Consumer-benefiting, meaning that the efficiencies must benefit substantially the same consumers as those who would otherwise be harmed by the merger, ensuring they are not worse off as a result. Benefits should be quantified, if possible, but other evidence, such as consumers’ valuation of increased quality or other non-price parameters, may suffice.

The Commission is placing greater emphasis on balancing efficiencies against anticompetitive effects as an “integral part of the Commission’s assessment.” In making this assessment, the Commission will take into account the relevant parameters of competition, the magnitude of the relevant benefit and harm, and the likelihood and timeframe within which they might materialize. The Commission has already been moving towards a more efficiency-friendly approach in practice, for example, in the recent Airbus/Air France/JV case, in which the Commission encouraged the parties to establish efficiencies early in the review process.

B. Greater Emphasis on Innovation and Dynamic Competition

The Guidelines embed a more forward-looking and dynamic assessment of mergers in the following respects:

1. Assessment of market power: While introducing new categories and labels for market shares (“low” (<10%), “moderate” (10%–25%), “material” (25%–40%), “high” (40%-50%) and “very high”) (>50%)), the Guidelines de-emphasize static metrics in favor of forward-looking indicators. The Guidelines acknowledge that market shares are a snapshot in time, and are not always an accurate benchmark for how competition works in practice. Where appropriate, the Commission will place higher reliance on more “dynamic” indicators, such as historic market share trends, future market share estimates, and other competitive forces (e.g., customer price sensitivity, profit margins, barriers to entry). The Guidelines stress that internal documents are key to this analysis, and also note that a high valuation of a target by a purchaser may show the significance of its “dynamic competitive potential” as an indicator of (future) market power.
2. The counterfactual: Although the Commission is generally reluctant to analyze the causality between the merger and its potential effects on competition in a hypothetical situation without regard to the pre-merger conditions, the Guidelines acknowledge that existing pre-merger conditions may, in some cases, not be reflective of normal or foreseeable market conditions and therefore the Commission will—exceptionally—take into account future events or market evolutions that can be predicted with a sufficient degree of certainty based on evidence.
3. Loss of innovation as a theory of harm and a new “innovation shield”: The Guidelines treat loss of innovation as a standalone theory of harm, particularly in the case of “killer acquisitions” aimed at preventing an innovative company from reaching the market by acquiring (“killing”) it before it achieves maturity. At the same time, the Guidelines introduce a new concept of “innovation shield” for acquisitions of a small innovative target, such as a start-up or an R&D project with dynamic competitive potential. This “shield” permits M&A where there is no R&D overlap or, if there is, at least three other firms are independently active in R&D in the same space, with similar competitive potential to that of the merged entity, and the parties have low market shares (measured against certain defined thresholds). DMA “gatekeepers” and acquirers that are “the largest firm in the relevant market” would likely not benefit from the innovation shield.
4. Dynamic incentives to foreclose: The Commission will assess whether, even absent a profitable foreclosure strategy immediately after the merger, the merged entity may have an incentive to strengthen, entrench or extend its market power over time.
5. Dynamic efficiencies: The Commission will consider efficiencies which confer the ability or increase the incentives to invest or innovate into new or improved products or services, improved distribution or production, or other procompetitive parameters of competition. Although harder to quantify, the Guidelines specifically take dynamic efficiencies into consideration in a holistic assessment of whether the potential benefits of the merger outweigh its potential harm.

C. A More Sophisticated System of Theories of Harm

Until now, the Commission distinguished between anticompetitive “coordinated” and “non-coordinated effects” in horizontal, vertical and conglomerate mergers. The new Guidelines overhaul the Commission’s conceptualization of possible theories of harm in its entirety, introducing the following new categories which apply to all merger types:

1. Loss of head-to-head competition, which is assessed by reference to the merging parties’ existing market power and the degree of competition that would be lost between them as a result of the merger by reference to closeness of competition and the importance of the competitive force exerted by the merging parties on each other.
2.  Loss of investment and expansion competition, through discontinuation, downsizing, delay or redirection of investment projects, or a reduced incentive to invest, assessed by reference to the parties’ existing investment and expansion plans, and the degree of dynamic competitive interaction between the parties.
3.  Loss of innovation competition (for example, through “killer acquisitions”), which is assessed by reference to the dynamic competitive potential of, and the degree of dynamic competitive interaction between, the parties’ R&D projects, their innovation capabilities or R&D organizations, and the number of remaining competitors that have similar R&D projects, capabilities or resources.
4. Loss of potential competition by eliminating a possible new entrant in the relevant market(s).
5. Foreclosure, for example by restricting or impeding a competitor’s access to inputs or customers, or by engaging in tying or bundling.
6. Entrenchment of a dominant position where at least one of the merging firms is dominant in a “core market” or across closely related markets (ecosystem), by structurally creating or reinforcing barriers to entry, expansion and innovation, resulting in reduced market contestability.
7.  Coordination among the merged entity and remaining competitors to reduce competition between them.
8. Access to or sharing competitively sensitive information pertaining to competitors, which the Guidelines consider not just as facilitating coordination among competitors, but also a standalone theory of harm in and of itself.
9. Increasing the merged entity’s market power over a portfolio of products (“portfolio effects”).

This is not an exhaustive list. The Guidelines reserve the Commission’s right to formulate new theories of harm depending on the relevant merger context. The Commission may, case-by-case dependent, assess a merger against one or more of such types of anticompetitive effects.

Implications for Dealmakers

The draft Guidelines are subject to a public consultation, which will close on 26 June 2026, and—as such—remain subject to change. The Commission will finalize its review of the Guidelines in Q4 2026 and, once finalized, is expected to adopt the Guidelines in their final form towards the end of 2026 or early in 2027.

1. New opportunities. Although not legally binding, once adopted, the Guidelines will create a legitimate expectation that the Commission will assess mergers in accordance with the new framework set out in the Guidelines. The Commission will not be able to depart from them without justification. This creates new opportunities for dealmakers, who now have a wider repertoire of possible justifications for transactions that might otherwise appear problematic. The types of efficiencies introduced in the Guidelines are broader than the types of merger efficiencies which the Commission would have accepted 20 years ago, extending beyond economics-based efficiencies to encompass policy-driven considerations.
2. New complexities. With opportunity from policy-driven efficiencies comes complexity. The Commission recognizes that policy objectives may not be “readily subject to quantification” and that it enjoys a “margin of discretion in weighing such price and non-price parameters of competition in the balancing exercise in order to establish an overall assessment of the merger’s effects on businesses and consumers.” Merging parties will need to find creative ways to substantiate theories of benefit grounded in policy objectives, and would be well-advised to present these to the Commission early on in the merger review process. At the same time, merging parties should be prepared for the Commission to carefully probe the potentially harmful effects of a merger on non-price parameters of competition, and whether such effects may give rise to any theory of harm.
3. Continued focus on internal documents. Building on the Commission’s current merger review practice, the Guidelines highlight the importance of the merging parties’ ordinary-course internal documents as a source of evidence for the assessment of market power, theories of benefit and theories of harm. The parties’ internal documents will be key, in particular, to evidencing “unquantifiable gains” to be attained by policy-driven efficiencies.
4. No “blank cheque.” The Guidelines will have no legally binding effect and the EU Merger Regulation and accompanying legislation will remain unchanged. As EU Competition Commissioner Teresa Ribera clarified in an interview with Capitol Forum in April 2026, the Guidelines are no “blank cheque” for dealmakers, and the Commission will not approve deals based on companies’ “wishful thinking.” Expectations of a significantly more permissive EU merger environment may therefore be overstated, with evidentiary burden, quantification and substantiation of alleged economic and non-economic benefits remaining central to deal approvals.
5. Outlook. How the balancing test will be applied in practice remains to be seen. The Commission has so far shied away from balancing policy objectives against anticompetitive effects in other contexts, such as in assessing the impact of foreign subsidies on competition in Adnoc/Covestro. Nevertheless, the Commission will be keen to see the new Guidelines applied in practice, which creates real opportunity. Merging parties are encouraged to formulate “theories of benefit” early in the process to anticipate and counter possible theories of harm. And—perhaps—the Commission will dare to take a bolder approach under the EU Merger Regulation, armed with the new concepts introduced by the Guidelines.