A shift in EU merger control policy and practice could affect deal certainty and create opportunities for complainants

While referrals from national authorities to the Commission have always been possible, the Commission would previously not take the case where the transaction was not subject to merger control approval by any national authority. The parties to a transaction could therefore safely complete a deal that was not subject to notification under the EU Merger Regulation or the merger control regimes in any of the member states. This is no longer necessarily the case. Following a shift in policy, the Commission is now prepared to scrutinise transactions that do not meet the thresholds for mandatory notification in any member state. To this effect, the Commission recently adopted new guidance on the application of the referral mechanism in the EU Merger Regulation (here). Soon after, the Commission decided to accept referral requests from a number of member states to assess the proposed acquisition of GRAIL by Illumina under the EU Merger Regulation (see here). In some situations, the national competition authorities are therefore now encouraged by the Commission to request a referral to the EU of deals that they are not competent to assess under their domestic rules, because the applicable thresholds are not fulfilled, and that are worth reviewing at the EU level. This shift in policy and practice is primarily intended to capture so called killer acquisitions - an acquisition of a maverick or future entrant that would eliminate an important competitive force - and other potentially anti-competitive mergers and acquisitions where the turnover of the parties involved do not adequately reflect their competitive importance. This risk must be taken into account in the planning of a deal and preparing the transaction agreements. For third parties that may be negatively affected, the shift creates further opportunities for complaints and intervention.