Killing ‘killer acquisitions’: is the EC going too far with its policy change on referrals under Article 22 of the Merger Regulation? – Remark

Analysis of policy change
Conclusion and comments


On March 26, 2021, the European Commission (EC) issued guidance (the Guidance)(1) that national competition authorities in the European Union should refer transactions that do not meet the EU’s merger control thresholds. EU or national and would therefore escape merger control in the European Union. Union to the EC. This is in line with Article 22 of the EC Merger Regulation (ECMR).(2) These guidelines constitute the most significant overhaul of the EU merger control system since the adoption of the ECMR in 2004.

This policy change has the potential to be highly disruptive to business transactions, and the guidance does not eliminate this new uncertainty. Since its introduction, the ECMR has been an excellent model around the world as it provided clear and objective jurisdictional thresholds and questions about its application arose relatively infrequently. The first victims of this change in policy are the parties to the Illumina/Grail transaction, who fought very hard against this imposed merger control procedure, including the standstill obligation.

Article 22 of the BER allows one or more EU Member States to ask the EC to examine concentrations which do not have the necessary Community dimension but which affect trade between Member States and competition within the territory of the applicant.

The provision is known as the “Dutch clause” because it arose out of an effort by the Netherlands to fill a legal loophole, as the country did not have its own national control legislation. mergers. For this reason, the possibility of being able to request the postponement of the review of certain mergers was necessary in order to ensure that the respective mergers were subject to any regulation. In the meantime, all member states except Luxembourg have legislated their own national merger regulation laws and do not rely on EC merger review. The wording and meaning of the current Article 22 CR has since undergone several changes which, over time, have repeatedly altered the way Member States have used and continue to use the request for referral to the THIS.

Analysis of policy change

Recital 1 of the guidelines establishes as a fundamental objective the facilitation and clarification of their application, but the guidelines can also be interpreted as a manifestly fundamental change in Community policy. Although the ECMR in force was presumed capable of distinguishing sufficiently between mergers that did not raise competition concerns and those that needed to be reviewed, certain industries were deemed insufficiently covered by the current turnover thresholds .(3) Concentrations in these industries may have a significant impact on competition and remain below national and European turnover thresholds.

Prior to the publication of the Guidance, the number of times Member States made use of Article 22 CTMR was low despite the wording of the provision allowing Member States to request referrals broadly, regardless of any threshold.

With the guidelines now published, the EC has changed its policy from discouraging referrals(4) to encouraging them in order to fill any (perceived) regulatory gaps within any industry. Recital 11 of the guidelines therefore states that:

the Commission intends, in certain circumstances, to encourage and accept referrals in cases where the referring Member State does not have the original jurisdiction to hear the case (but where the criteria of the 22 are met).

In addition to guidance elaborating on the legal requirements for a referral pursuant to Article 22(1) ECMR(5), the EC has also developed ‘other factors which may be taken into account’. There, the Guidelines unequivocally reveal the objective of the EC: to get hold of murderous acquisitions which are circumscribed as “transactions where the turnover of at least one of the companies concerned does not reflect its real competitive potential or future”.(6)


It is remarkable and singular that the EC extends its powers through guidelines to rein in so-called “killer acquisitions”. For years the introduction of new thresholds has been discussed in the European Union, including the introduction of a transaction threshold as known from the United States and which was introduced in Germany and Austria in 2017; however, no political majority was found. Therefore, the EC has now taken action itself and can “abuse” Article 22 RECM, which was intended for completely different situations, to extend its powers. Although the policy change is indeed still covered by the wording of Article 22 CTMR, it was intended for completely different circumstances when the Dutch clause was introduced in 1990. This is not conducive to legal certainty , and such processes should not be used as a model. However, these changes must now be factored into transaction planning. As a result, not only the deadlines for closing transactions can be modified by potentially arbitrary referral requests. By trying to catch the killer acquisition, the EC could well be in danger of harmless by-catch – to the detriment of overall legal certainty.

Such lingering legal uncertainty can currently be observed in the Illumina/Grail Case. In April 2021, in response to a referral request from several EU member states, the EC asked Illumina to notify the proposed acquisition of cancer test maker Grail, a transaction that did not reaches the notification thresholds in the European Union or in any Member State. Now, DNA sequencing company Illumina is locked in multiple fights with the EC and the court over its acquisition of Grail. The European Union opened a full investigation into the deal and, in September 2021, brought proceedings against Illumina for its decision to take the plunge and complete the deal while the merger control investigation was in progress. Classes. Many lessons will be learned from these disputes against the expansion of EC powers.

For more information on this subject, please contact Sebastien Jungerman Where Daniel Bunsen to Arnecke Sibeth Dabelstein by telephone (+49 69 979885 465) or by e-mail ([email protected] Where [email protected]). The Arnecke Sibeth Dabelstein website is accessible at the address


(1) Communication from the Commission of 26 March 2021 – C(2021) 1959 final,

(2) Council Regulation (EC) No. 139/2004 of January 20, 2004 on the control of concentrations between undertakings, 2004: 024:0001:0022:en:PDF

(3) See recital 9 of the guidelines.

(4) See recital 8 of the guidelines.

(5) Recitals 13 to 17 of the guidelines.

(6) Recital 19 of the guidelines.

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