On March 26, 2021, the European Commission (EC) published the findings of its recent evaluation of procedural and jurisdictional aspects of European Union (EU) merger control. The key result is a change in the EC’s policy regarding merger review referrals from EU Member States to the EC. Under the new Guidance on the referral mechanism set out in Article 22 of the EU Merger Regulation (Article 22 Guidance), in certain circumstances, the EC will accept case referrals from Member States even if the transaction is not reportable in that Member State under its national law.
The policy change is aimed at capturing transformative transactions in nascent markets— particularly in the tech and pharma sectors, including so-called killer acquisitions, that otherwise would not be subject to merger control at all—either at the EU or the Member State level. This type of transaction also has been a recent focus of the US and other competition authorities outside Europe. The policy change will broaden the de facto application of EU merger control law and create additional legal uncertainty for certain transactions, although the practical impact of the policy change remains to be seen. It may bring EU practice closer to that in the United States, where the antitrust agencies fairly commonly review transactions that are not reportable under the Hart-Scott-Rodino Premerger Notification Act.
