The EU is preparing “biggest relaxation” of its merger rules in decades, as Europe faces rising pressure to build companies capable of competing with US and Chinese rivals, the Financial Times has reported.
Draft guidelines seen by the FT indicate the European Commission plans to give more weight to “innovation, investment and resilience of the internal market” when deciding whether to approve corporate deals.
The document is not final and could still change. However, it would widen the basis on which the EU judges whether a merger should be allowed.
If adopted, the approach would reflect a broader change in political thinking across Europe, with more calls to enable “European champions” to take on large international competitors.
“The guidelines are a break from the past,” an EU official told the publication, calling them “an ambitious approach that reflects the realities of increasingly challenging global competition”. The official added that the guidelines reflect “the priorities of this Commission mandate – ambition and scale”.
The draft maintains the principle of preserving effective competition. But it also argues that “the growth and scaling-up of firms . . . so as to reach the necessary size to compete globally, can be pro-competitive”, adding that this can have a “positive impact” on the EU.
It also cites a changed geopolitical backdrop and says the economy has increasingly moved towards innovation-heavy sectors, where both scale and innovation are critical to compete.
Under the draft, the EU’s antitrust division would be asked to pay closer attention to the effect of mergers on “scale, innovation, investment and resilience as pro-competitive factors that can benefit from a degree of consolidation”.
The guidelines argue that scale and innovation can ultimately help consumers, for example by supporting access to critical inputs and strengthening supply chain resilience.
The European Commission declined the FT’s request for comment.
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