Brussels: Europe’s competition regulators are rewriting the rulebook that governs how companies combine, and the draft on the table could reshape merger control for a generation.
The European Commission published draft guidelines on 30 April 2026 that would fold the bloc’s separate horizontal and non-horizontal frameworks into a single, unified approach to assessing deals. A public consultation ran until 26 June, and Brussels aims to adopt the final text before the year is out. The revision marks the most significant refresh of merger analysis since the current regulation took effect in 2004.
The reform did not emerge in a vacuum. Mario Draghi’s 2024 report on European competitiveness warned that the bloc was falling behind the United States and China on investment and innovation, and it argued that overly cautious enforcement was keeping European champions too small to compete globally. That critique has pushed the Commission to think harder about when consolidation helps rather than harms.
The draft guidelines try to hold two ideas at once. They give more room to arguments about innovation, efficiency and the need for scale, which will cheer companies and their advisers. At the same time, they sharpen the tools for catching deals that snuff out future competition before it can take root.
The innovation shield
The centrepiece is a proposed ‘innovation shield’ — a safe harbour for transactions involving small, innovative firms. The Commission would, in principle, decline to challenge a deal that falls within defined thresholds, with different limits for overlaps between research pipelines, products in development and existing products.
The same framework narrows the definition of a so-called killer acquisition. Under the draft, a deal earns that label only where a dominant firm buys a nascent rival genuinely capable of growing into a significant competitor. The wording matters: it promises clearer boundaries for dealmakers while preserving the Commission’s power to intervene in the cases it cares about most.
Critics counter that safe harbours invite gaming, and that the hardest cases rarely fit neat thresholds. Much will hinge on how strictly Brussels reads its own tests once the guidelines are final.
Jurisdiction still unsettled
Beneath the guidelines lies an unresolved question of reach. The Commission and member states keep hunting for ways to review deals that slip below formal filing thresholds — precisely the below-radar acquisitions that worry innovation hawks. Recent weeks show the machinery already in motion: on 15 July the Commission referred Iliad’s bid for parts of Altice’s SFR to the French Autorité de la concurrence, and on 10 July it cleared Baker Hughes’ purchase of Chart Industries subject to conditions.
Those cases underline a system that stays busy and consequential even as its foundations shift. Businesses will read the final Commission competition guidance closely for signals on where the line now sits.
The stakes run high. Set the balance too tight and Europe forgoes the scale its industries need; set it too loose and it risks entrenching incumbents at the expense of the next generation of challengers. The guidelines due later this year will reveal which risk Brussels fears more.
