This client alert offers a comprehensive overview of European merger control throughout 2024. Covering the key developments from 2024 that companies contemplating M&A transactions should be aware of if these will impact the EU, it also provides some insights into what can be expected in this field in 2025.  Key highlights from 2024 include:

• the ECJ’s far-reaching judgment in Illumina/GRAIL limiting the EC’s merger review powers and the EU and Member States’ reactions to this seminal judgment;
• the EC’s revised Market Definition Notice; and
• the appointment of Teresa Ribera Rodríguez as the EU’s Competition Commissioner succeeding Margrethe Vestager.

In total, 392 deals were notified to the EC, an increase in the number notified in 2023 (356). Most 2024 clearances (390) were unconditional, with 351 of these under the simplified procedure, the highest number ever. Conditional approvals (eight) were at a 10-year low. 2024 also marked an increase in withdrawn notifications (nine in 2024 vs five in 2023). Five deals were conditionally approved in Phase I and three in Phase II, all subject to divestment remedies. As in previous years, the EC continued to show a clear preference for structural remedies over behavioural remedies, particularly for Phase I resolutions.  

2024 also saw the Foreign Subsidies Regulation (FSR) becoming a more significant part of the EU merger control landscape, adding another layer of potential scrutiny for companies to navigate.

Significant EU Court Judgments

ECJ Limits EC’s Merger Review Powers

In September 2024, the ECJ issued a landmark judgment limiting the EC’s authority to review mergers that fall outside the notification thresholds in the European Union and its Member States. In its decision, the ECJ highlighted the importance of clear and certain jurisdictional boundaries. 

The ECJ held that the EC could not assert jurisdiction over the Illumina/GRAIL transaction under Article 22 of the EU Merger Regulation (EUMR). This decision overturned a 2022 GC ruling and annulled the EC’s decision to accept requests from several Member States to review the deal, even though those Member States lacked jurisdiction themselves.

The ECJ resolved some of the regulatory ambiguity stemming from the EC’s adoption of the revised Article 22 Guidance in 2021, especially for transactions involving targets with minimal or no EU revenue.

Following the judgment, the EC withdrew several prior decisions relating to Illumina/GRAIL given the ECJ’s determination that the EC lacked jurisdiction to adopt them. Those decisions included (i) opening an in-depth investigation into the proposed deal, (ii) prohibiting the deal, (iii) imposing interim measures on the parties, (iv) ordering Illumina to unwind its acquisition and (v) fining Illumina and (to a limited extent) GRAIL for gun jumping. The EC also withdrew its 2021 Guidance on Article 22 EUMR.

The ECJ’s decision brought a swift end to the EC’s review of the Brasserie Nationale/Boissons Heintz transaction. The EC had claimed jurisdiction over that transaction following a referral from the Luxembourg competition authority, which lacked jurisdiction to review the transaction. Earlier in 2024, the parties had abandoned two other transactions where the EC had claimed jurisdiction under the same circumstances, Qualcomm/Autotalks and EEX/Nasdaq Power. As discussed below, the EC and the Member State competition authorities are evaluating how they might exercise authority to review below-threshold transactions and fill any potential enforcement gap resulting from the Illumina/GRAIL judgment.

GC further clarifies conditions for waiving remedy commitments

In January 2024, the GC annulled the EC’s 2020 decision to waive Nidec’s commitment not to reacquire the refrigeration compressor business it divested in 2019 when it obtained clearance for its acquisition of Embraco from Whirlpool.

The GC stated that the EC could waive the prohibition on reacquisition if the structure of the market had changed to such an extent that prohibiting Nidec from gaining influence over the divested business was no longer necessary to protect competition.

The GC observed that although there is no requirement that a period of “at least three years” elapse between the clearance and a request for a waiver of a commitment, the EC’s investigation must reveal that there has been a substantial, namely “significant” and “lasting”, change in the relevant market structure since the clearance. In this case, the GC concluded that although the EC’s decision found a significant change in the market structure, the EC erred by failing to assess whether this change was lasting.

In October 2024, following a subsequent investigation, the EC partially waived Nidec’s 2019 commitments.

ECJ confirms EC’s wide margin of discretion to block deals that do not lead to dominance in concentrated markets

In October 2024, the ECJ upheld the EC’s prohibition of a proposed joint venture between two major steel manufacturers, Thyssenkrupp and Tata Steel. In 2019, the EC blocked the deal, concluding that it would lead to a significant impediment to effective competition (SIEC) and, in some markets, a dominant position. In 2022, the GC upheld the EC’s decision.

In 2024, the ECJ largely followed the GC’s judgment in Thyssenkrupp and its 2023 judgment in CK Telecoms confirming the EC’s significant discretion when analysing deals in concentrated markets. The ECJ reiterated, in particular, that the standard of proof for the EC to show an SIEC is the balance of probabilities and not the higher standard of a strong probability indicated in the GC’s now overturned CK Telecoms judgment. The ECJ confirmed that an SIEC is not limited to cases resulting in a dominant position but also covers deals that eliminate important competitive constraints in oligopolistic markets.

Key EC Phase II Decisions

In 2024, the EC conditionally approved three deals following in-depth investigations, all with upfront buyer divestment remedies. Although the EC did not formally block any proposed mergers, the parties abandoned two deals (Amazon/iRobot and IAG/Air Europa) during Phase II reviews.

Three out of four Phase II investigations in 2024 were focused on mergers in the airline industry. Only two of these three were approved subject to commitments while one was abandoned due to concerns raised by the EC. In Korean Air/Asiana, the EC raised concerns regarding anticompetitive consequences in air cargo transport services between Europe and South Korea and in passenger air transport services on routes between Seoul and certain European destinations. To address these concerns, the parties offered to divest Asiana’s global cargo freighter business and make Korean Air’s slots and traffic rights available to a rival airline—T’way—to enable it to start flight operations on passenger routes.

In Lufthansa/ITA, the EC accepted the parties’ undertakings to offer a package of slots, other assets and agreements with competitors to enable them to improve their competitiveness and start flights on affected routes. This package was proposed to address the concerns the EC expressed about potential reduced competition on several short- and long-haul flights and the merged entity’s potential dominant position in Milan-Linate airport.

IAG abandoned its attempt to acquire Air Europa after the EC rejected the parties’ proposed undertakings as insufficient. In 2021, IAG also abandoned its attempt to acquire Air Europa because of concerns from the EC. During the 2024 in-depth review, the EC concluded that the deal would remove competition between the two closest competitors for flights on domestic, short-haul and long-haul routes within, to and from Spain. The parties offered to divest 50% of Air Europa’s total slots for flights within, to and from Spain in 2023 to two separate buyers (one for domestic and short-haul flights and one for long-haul flights). However, it was reported that the EC was not satisfied that this would be viable, as the potential remedy takers would not benefit from network effects resulting from connections between the routes. The EC’s stance suggests that the EC is disinclined to accept simple slot divestment remedies, which it believes have proven ineffective in the past, and will often insist that airlines offer more comprehensive remedy packages.

In its other Phase II decision, the EC conditionally cleared the joint venture between Orange and MásMóvil, creating the largest mobile operator by customer numbers in Spain. The EC found that the transaction would have eliminated a close and important competitor. The EC cleared the deal subject to a divestment package and an optional national roaming agreement addressing its concerns.

Key Legislative Updates

In February 2024, the EC adopted its revised Market Definition Notice (Notice), providing updated guidance on how the EC defines markets in merger control and antitrust investigations.

Rather than breaking new ground, the Notice mainly articulates existing practice regarding digitalisation, highly innovative markets and globalised trade flows by incorporating case law and the EC’s decisional practice since the adoption of the EC’s 1997 Market Definition Notice.

From a merger control perspective, the main points are:

• The EC takes account of the parameters of competition that customers consider relevant when defining markets. The relative importance that customers attach to particular parameters, such as the product’s price, degree of innovation, sustainability and durability, and the resilience of supply chains, may change over time.
• While the EC recognises potential competition as one of the three main sources of competition along with demand and supply substitution, the Notice restates the EC’s practice of not accounting for potential competition when defining markets.
• Consistent with recent EC merger decisional practice, the mere existence of imports into a geographic area is not necessarily sufficient to expand the geographic scope of the relevant market to all the areas from which exports originate if the relevant customers in fact would not readily source from these areas.
• The EC may account for frequent and significant R&D in highly innovative industries when defining product markets. Depending on the level of visibility into R&D processes and the ability to predict the products that a pipeline product may compete with, the EC may conclude that the pipeline product belongs to an existing product market or that it constitutes a new product market. Where the R&D process can feed into various products, the EC may then identify the boundaries within which companies compete in such R&D efforts and assess whether there could be a loss of innovation competition.
• The Notice explains the principles that the EC applies to digital ecosystems by reference to aftermarkets and bundles. As with aftermarkets, the primary and secondary products in digital ecosystems are connected by technological links or interoperability. The Notice states that if the secondary product is offered as a bundle, the EC may assess whether the bundle constitutes a relevant market on its own.

Foreign Subsidies Regulation

The FSR gives the EC authority to assess certain transactions and public tenders that implicate possible concerns regarding subsidies from non-EU governments. Specifically, the FSR sets notification thresholds and grants the EC powers to initiate ex officio investigations, including into closed deals.

During the first year of the FSR’s enforcement, the EC cleared most deals after Phase I review. However, it opened an FSR Phase II investigation into Emirates Telecommunications Group’s planned acquisition of parts of PPF Telecom Group (Emirates Telecommunications Group/PPF Telecom Group). The EC ultimately cleared the acquisition subject to remedies. This is the only conditional FSR clearance to date. Notably, the deal was not notifiable to the EC under the EUMR.

The EC concluded that Emirates Telecommunications Group (e&) had received subsidies from the United Arab Emirates (UAE) in the form of an unlimited state guarantee and a loan from UAE-controlled banks that directly facilitated the deal. In the EC’s view, these subsidies would have distorted competition in the European Economic Area (EEA) because they would have artificially improved the merged entity’s capacity to fund its activities, allowing it to expand more than entities that had not received such subsidies. After a four-month investigation, the EC cleared the deal subject to behavioural remedies that included (i) removing the unlimited guarantee from the UAE; (ii) restricting future financing of PPF’s EU activities by e& and the Emirates Investment Authority (EIA); (iii) requiring that other transactions between EIA, e& and PPF take place at arm’s length; and (iv) requiring e& to inform the EC of future deals that are not notifiable under the FSR.

The FSR also applies to public procurements. In 2024, the EC opened three in-depth investigations into procurement bids by Chinese companies (ENEVO Group including LONGi Solar Technologie GmbH, Shanghai Electric and CRRC Qingdao Sifang Locomotive). During its Phase I reviews, the EC found that these three companies had received foreign subsidies that could distort the internal market in the European Union. The Chinese companies abandoned all three bids shortly after the in-depth reviews commenced.

The EC also opened its first two ex officio FSR investigations, which concerned (i) activities of Chinese wind turbine producers that had allegedly received foreign subsidies that could have distorted competition for wind energy projects in Bulgaria, France, Germany, Greece, Romania and Spain; and (ii) the Chinese state-owned company Nuctech. Nuctech manufactures surveillance technology and security equipment. It was the target of the first “dawn raid” under the FSR. The EC raided the company’s Dutch and Polish premises and requested, among other things, access to mailboxes of Chinese Nuctech employees whose emails are stored on servers in China. The company appealed the decision authorising the inspection to the GC and applied for interim measures seeking suspension of the EC’s requests. The GC dismissed Nuctech’s application for interim measures, confirming the EC’s powers to inspect the premises and request information, including information stored outside the European Union. The GC’s judgment on Nuctech’s application to annul the EC’s decision authorising the raid is still pending.

Parties should evaluate potential application of the FSR when planning deals or bids for procurements that will affect the European Union. While the EC has not yet launched any ex officio investigations into closed deals, the EC likely would not hesitate to do so if a foreign subsidy could distort competition in the EEA. Moreover, non-EU buyers, especially state-owned buyers or buyers getting financial backup from foreign state banks, should consider whether they might need to offer commitments—e.g., divestment, refraining from certain investments, repaying the foreign subsidy, restrictions on commercial activities, giving access to infrastructure or publication of R&D results—to obtain EC clearance.

What to Expect in 2025 and Beyond

In December 2024, Teresa Ribera Rodríguez was appointed as the EC’s First Executive Vice-President for a Clean, Just and Competitive Transition, taking over the competition portfolio from Margrethe Vestager, who had held this position for 10 years. In her Mission letter, the EC President, Ursula von der Leyen, gave Ms Ribera 12 tasks to modernise EU competition policy, notably including addressing the risks of “killer acquisitions”—i.e., those where a leading incumbent supplier acquires an incipient competitor—post-Illumina/GRAIL and reviewing the EC’s Horizontal Merger Guidelines to “give adequate weight to the European economy’s more acute needs in respect of resilience, efficiency and innovation. The tasks are largely based on the September 2024 report on European competitiveness and the future of the European Union prepared by the former European Central Bank president and former Italian Prime Minister Mario Draghi.

Killer Acquisitions

As noted above, following the Illumina/GRAIL judgment, the EC withdrew its 2021 Article 22 EUMR Guidance. Illumina/GRAIL and the Guidance’s withdrawal provide some legal certainty that the EC will not scrutinise deals that do not meet EU or national merger control thresholds. However, the EC will likely explore new instruments to allow it to stop smaller acquisitions that could jeopardise competition. As suggested in the Draghi report, the EC may institute new mechanisms to enable it to investigate even closed deals.

The EU Member States’ national competition authorities may also explore new ways to exercise jurisdiction to review smaller deals. The ECJ’s 2023 Towercast judgment confirmed that EU national competition authorities can investigate non-notifiable acquisitions by dominant companies. Because Towercast set a relatively high bar for intervention, in that it only applies to already dominant companies, Member States may consider revising existing thresholds or adding new transaction value thresholds (such as in Austria and Germany) to their merger control laws.

More EU Member States may also consider giving their competition authorities the “golden power” to review deals that do not meet their merger notification thresholds but may distort competition in national markets. Currently, Denmark, Hungary, Italy, Latvia, Lithuania, Sweden and EEA Member States Iceland and Norway can “call in” below-threshold deals for review. This goes some way to filling any perceived enforcement gap post-Illumina/GRAIL because these national competition authorities may review or refer to the EC below-threshold deals at their discretion. One recent example is Nvidia/Run:ai. This deal did not meet the Italian merger thresholds, but the Italian competition authority nevertheless exercised its power to (a) review the deal’s impact on the AI sector and (b) then refer the deal to the EC under Article 22 EUMR. While the EC cleared the acquisition, Nvidia reportedly has appealed the EC’s decision to accept Italy’s referral request to the GC.

Despite the Illumina/GRAIL judgment, a growing trend for competition authorities to gain wide-ranging powers to “call in” transactions that were not notifiable will continue to create uncertainty for parties to M&A deals. They could find themselves subject to investigations by national authorities or the EC when they might not have contemplated that possibility because their transaction was not reportable.

EU Champions and Innovation

The EC President allocated to the new Competition Commissioner another important task: revising EU merger policy to allow EU companies to achieve economies of scale necessary to innovate and effectively compete with leading firms, especially those headquartered in the United States or China. The EC, however, would still need to balance the need for big and strong EU innovators against the protection of long-term effective competition. The burden will be on the merging parties to demonstrate that the “innovation defence” justifies pooling of resources to cover high fixed costs and achieve the scale needed to compete globally.

UK-EU Competition Cooperation

In October 2024, the United Kingdom and the European Union formally concluded negotiations on a post-Brexit UK-EU Competition Cooperation Agreement. The agreement, which still needs to be ratified, is intended to improve coordination between the UK’s Competition and Markets Authority (CMA), the EC and EU Member State national competition authorities regarding important antitrust and merger investigations. Notably, under the contemplated agreement, the CMA will be allowed to coordinate and share nonconfidential information directly with both the EC and all the Member States’ national competition authorities to avoid “any conflicts between jurisdictions”. However, the EC and CMA will not be able to share confidential information without merging parties’ consent and they will not be able to have any investigative assistance from each other. The agreement is expected to come into force during 2025.

Decisions and Judgments to Look Out For in 2025

Looking ahead to 2025, we await the outcome of the only ongoing Phase II investigation in Liberty Media/Dorna Sports, where the EC has raised concerns about potential restrictions of competition in markets for licensing broadcasting rights for sports content.

Also pending is the outcome of the EC’s investigation into alleged procedural violations in Kingspan’s abandoned attempt to acquire Trimo. The EC alleged that Kingspan provided incorrect, incomplete and misleading information regarding its internal organisation and relevant markets. The EC has previously fined several companies for infringing the EUMR’s procedural rules, but this investigation is the first that follows abandonment of a transaction. Kingspan has meanwhile applied to the GC arguing that the EC wrongfully did not keep proper records of all its meetings and calls with Kingspan or with Kingspan’s external counsel and refused access to minutes produced by the EC’s officials during the merger investigation.

Also, Booking has appealed to the GC the EC’s decision to block its acquisition of eTraveli based solely on “conglomerate effects” concerns. Booking argues that the EC departed from the Non-Horizontal Merger Guidelines without justification and made mistakes in its counterfactual assessment.

Further Reading Materials

For further detail on the developments discussed here, please see the following client alerts:

• Two Negatives Don’t Make a Positive: European Court Rules That European Commission Cannot Review Mergers That Are Not Reportable at the EC Level or in a Member State
• The EU Updates the Way It Defines Markets
• The UK-EU Competition Cooperation Agreement: Closer Apart?
• The European Commission’s Unprecedented Prohibition of an Acquisition Based on “Ecosystem Concerns”
• 2023 EU Merger Control Highlights and Looking to 2024

These and many other EU merger developments will be discussed in detail in the comprehensive forthcoming update to Sweet & Maxwell’s Rowley & Baker: International Mergers - The Antitrust Process (General Editor: Mark Opashinov), to which WilmerHale is contributing a revised and updated chapter on EU merger law.

For more information on this or other antitrust matters, please contact one of the authors or another member of WilmerHale’s antitrust/competition team.