EU Merger Rules Rewritten: A 25% Share Safe Harbour, or Bigger Tech Risk?

Brussels is signaling a more pro-merger stance without changing the legal test

The Commission's draft points to a more pro-merger tone in EU merger control, not a broad deregulatory retreat. It would replace the 2004 Horizontal and 2008 Non-Horizontal guidelines with a single, consolidated framework. The consultation closed earlier this month, and the final guidelines are expected later this year.

What changed, and what did not

The legal test itself remains the significantly impede effective competition test. What changes is how the Commission organizes the analysis around it. Demonstrated efficiencies are elevated to a "key role", and the draft says consolidation can support European competitiveness and investment capacity. That gives deal teams a clearer opening to argue that scale is a benefit, not just a risk.

The main tension for tech deals

The opening comes with a caveat. The same draft expands scrutiny around AI, algorithms, ecosystems, and other non-traditional competitive harms, while also placing increased evidentiary weight on internal documents. The practical takeaway is straightforward: Brussels appears more willing to accept industrial scale, but more cautious about digital ecosystem power.

How the draft tries to separate procompetitive scale from digital concentration

The draft keeps the same legal standard, but it changes the evidence that matters inside that standard. Efficiencies move to a "key role", the Commission introduces a structured "theory of benefit" framework, and parties are advised to develop the positive case at an early stage of deal planning.

The 25% threshold is a reference screen, not a blanket exemption

The draft introduces a standalone 25% market-share threshold for horizontal mergers. That is best understood as an analytical reference point, not a broad exemption. Deals below the screen may still face scrutiny, especially where other theories of harm are plausibly raised.

Scrutiny still widens in important areas

This is not a blanket reset in favor of consolidation. The Commission is widening its lens in areas such as:

• labour markets
• non-controlling minority shareholdings and common ownership
• AI, algorithms, and ecosystems
• long-term dynamic effects

That helps explain the draft's core split: Brussels is open to benefits tied to European competitiveness and investment capacity, while remaining wary of deals that primarily entrench domestic market power.

Why internal documents matter more now

For tech and deep-tech deals, the "innovation shield" matters because it targets small innovative targets or R&D projects with dynamic competitive potential. But it only helps if the file supports it. The draft says the Commission will place increased evidentiary weight on internal documents to support pro-competitive arguments. That makes document hygiene and early case building part of deal strategy, not just compliance.

What the final guidelines could still change

The draft is constructive, but the final text can still sharpen, dilute, or redirect its pro-consolidation signal. The consultation closed earlier this month, and the final text is expected later this year.

Which deals may benefit first

The first likely beneficiaries are transactions that can show industrial scale, investment capacity, or resilience benefits rather than pure platform expansion. The draft already points to consolidation supporting European competitiveness and investment capacity, and it is especially relevant to deals involving small innovative targets or R&D projects with dynamic competitive potential.

What would strengthen the pro-merger reading

Three features matter most in the final version:

• whether the structured "theory of benefit" framework remains a clear part of the analysis
• whether the draft's view that scale can be procompetitive stays central
• whether the draft continues to give "key role" to demonstrated efficiencies, including innovation-, investment-, and resilience-related benefits

What would weaken it

If the final text narrows the new screens, limits the innovation shield, or shifts back toward greater suspicion of digital scale, the pro-merger opening will shrink. The draft already makes clear that not all scale is treated the same way, and that the Commission distinguishes procompetitive scale from consolidation that mainly entrenches domestic market power. That remains the key boundary to watch.