Following a lengthy consultation period, the European Commission published its draft guidelines for merger control last week. These guidelines will serve as the basis for reviewing major mergers in Europe and deciding whether to approve or block them. Our initial reaction: the draft is cause for concern and potentially lays the groundwork for greater market concentration in Europe.
Mergers will be made easier
It is already becoming clear that the draft sends a strong signal to large companies that more mergers will be permitted in the future, even if this is not in the best interests of competition and consumers. Concentration is already on the rise, with negative consequences, as demonstrated by the European Commission’s own study, “Protecting Competition in a Changing World.”
Greater market concentration and less diversity in European markets lead to higher prices and undermine innovation as well as economic and social resilience. In the current situation, this is exactly the wrong approach. It fits into a broader political agenda of deregulation and prioritizing business interests at the expense of workers and consumers in Germany and Europe.
Strengthening the case for law firms and consulting firms
The draft creates many loopholes that are likely to make it easier to justify large mergers in the future. These loopholes open the floodgates not only for corporations, but also for law firms and consulting firms that are commissioned to find justifications for large mergers. Under very broadly defined exceptions related to resilience, security, and global competitiveness, the draft allows for the introduction of new arguments in favor of market concentration.
Monopoly-friendly statements by Commission top-level
In this context, the monopoly-friendly statements made by EU commissioners during a confidential meeting and published by MLex are cause for concern. They indicate that there is increasingly less support among top Commission officials for taking decisive action against market power.
Consistent Strengthening and Enforcement of Competition Rules
Instead of weaker merger control guidelines and inconsistent enforcement of competition and digital rules such as the Digital Markets Act (DMA), Europe now needs consistent enforcement of rules and significantly stronger merger control guidelines. We will further analysis the merger guidelines in the coming weeks. And we will be working toward the goal of consistent strengthening and enforcement of our rules.
Photo: Rebalance Now.
