EU antitrust regulators have made a significant decision to abandon a merger tool that was aimed at preventing killer acquisitions. This decision comes after the European Union’s top court rejected this expanded merger power, which had faced criticism for being too regulatory. The Court of Justice in Luxembourg sided with Illumina in a case against the European Commission’s use of Article 22 to assess Illumina’s $7.1 billion bid for Grail, even though it did not meet the EU’s merger revenue threshold.
Following this ruling, the European Commission has decided to withdraw the Guidance that was issued in March 2021. This Guidance allowed the EU antitrust watchdog to consider requests from national competition agencies to review mergers that were outside of their jurisdiction. The Commission had used this power to prevent killer acquisitions, where large companies acquire startups to eliminate competition, particularly in the technology and pharmaceutical industries.
With the abandonment of this tool, the Commission has stated that it may explore other methods to address killer acquisitions in the future. They have made it clear that the withdrawal of the Guidance does not prevent them from taking action on transactions involving small and medium-sized enterprises or small midcaps that fall below jurisdictional thresholds.
This decision marks a shift in the approach to preventing anti-competitive behavior in the EU market. The Commission’s move to reassess their strategy in tackling killer acquisitions demonstrates their commitment to fair competition and protecting smaller businesses from being forced out by larger corporations.
As the EU regulators navigate this changing landscape, it will be important for companies to stay informed about any new initiatives that may be introduced to address anti-competitive practices. By remaining vigilant and complying with competition laws, businesses can help maintain a level playing field in the European market.
