Analysis of the policy shift
Conclusion and comments


On 26 March 2021, the European Commission (EC) issued guidance (the Guidance)(1) that national competition authorities in the European Union should refer transactions that do not meet EU or national merger control thresholds and would therefore escape merger control in the European Union to the EC. This is pursuant to article 22 of the EC Merger Regulation (ECMR).(2) This guidance is the most significant reshaping of the EU merger control system since the adoption of the ECMR in 2004.

This policy change has the potential to be highly disruptive for corporate transactions, and the Guidance does not eliminate this new uncertainty. Since its introduction, the ECMR has been a great model around the world because it provided clear, objective jurisdictional thresholds and questions about its application arose relatively infrequently. The first victims of this policy change are the parties to the Illumina/Grail transaction, who have fought very hard against this imposed merger control procedure, including the standstill obligation.

Article 22 of the ECMR allows for one or more EU member states to request the EC to examine concentrations that do not have the necessary community dimension but affect trade between member states and competition within the territory of the applicant.

The provision is known as the "Dutch clause" because it originated from an effort made by the Netherlands pushing for a legal loophole to be closed, as the country did not possess its own national legislation on merger control. For this reason, the possibility of being able to request a referral of the examination of certain concentrations was needed in order to ensure that respective mergers were subject to any regulation at all. In the meantime, all member states apart from Luxembourg have legislated their own national merger regulation laws and do not rely on merger review conducted by the EC. The wording and meaning of the current article 22 of the ECMR has since undergone several changes that over time have repeatedly altered the way in which member states have made use, and continue to make use, of the request of referral to the EC.

Analysis of the policy shift

Recital 1 of the Guidance establishes as its fundamental aim the facilitation and clarification of its application, but the Guidance can also be interpreted as an evidently fundamental EC policy shift. Although the ECMR in force was presumed to be able to sufficiently distinguish between concentrations that were unproblematic competition-wise and those that needed to be reviewed, certain industries were felt to be inadequately covered by current turnover thresholds.(3) Concentrations in such industries can have a significant impact on competition and still fall short of both national and EU turnover thresholds.

In the run-up to the publication of the Guidance, the number of times that member states made use of article 22 of the ECMR was low despite the wording of the provision allowing member states to broadly request referrals irrespective of any thresholds.

With the Guidance now published, the EC has shifted its policy from discouraging requests for referral(4) to encouraging them in order to close any (perceived) regulation gaps within any industry. Recital 11 of the Guidance therefore states that:

the Commission intends, in certain circumstances, to encourage and accept referrals in cases where the referring member state does not have initial jurisdiction over the case (but where the criteria of Article 22 are met).

Besides the Guidance elaborating on the statutory requirements of a referral pursuant to article 22 (1) of the ECMR,(5) the EC also drew up some "other factors which may be considered". There, the Guidance bluntly reveals the EC's purpose: getting its hands on killer acquisitions that are circumscribed as "transactions where the turnover of at least one of the undertakings concerned does not reflect its actual or future competitive potential".(6)


It is remarkable and peculiar that the EC is extending its powers through guidelines to get a grip on so-called "killer acquisitions". For years, the introduction of new thresholds was discussed in the European Union, including the introduction of a transaction threshold as is familiar from the United States and that was introduced in Germany and Austria in 2017; however, no political majority was found. Therefore, the EC has now taken action itself and may "misuse" article 22 of the ECMR, which was intended for completely different situations, to extend its powers. While the policy change is indeed still covered by the wording of article 22 ECMR, it was intended for completely different circumstances when the Dutch clause was introduced in 1990. This is not conducive to legal certainty, and processes of this kind should not be used as a model. However, these changes must now be taken into account in transaction planning. As a consequence not only timelines for the closing of transactions may be altered by potentially arbitrary requests for referral. While trying to catch the killer acquisition, the EC may well be in danger of much harmless by-catch – to the detriment of overall legal certainty.

Such ongoing legal uncertainty may currently be witnessed in the ongoing Illumina/Grail case. In April 2021, in response to a referral request from several EU member states, the EC asked Illumina to notify the proposed acquisition of cancer detection test maker Grail, a transaction that did not meet notification thresholds in the European Union or in any member state. Now, the DNA sequencing company Illumina is locked in several fights with the EC and the court over its acquisition of Grail. The European Union has opened an in-depth investigation of the deal and, in September 2021, issued proceedings against Illumina for its decision to jump the gun and close the deal while the merger control investigation was ongoing. Many lessons will be learned from these disputes against the expansion of the EC's powers.

For further information on this topic please contact Sebastian Jungermann or Daniel Bunsen at Arnecke Sibeth Dabelstein by telephone (+49 69 979885 465) or email ([email protected] or [email protected]). The Arnecke Sibeth Dabelstein website can be accessed at


(1) Communication from the Commission of 26 March 2021 – C(2021) 1959 final,

(2) Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentration between undertakings,

(3) See recital 9 of the Guidance.

(4) See recital 8 of the Guidance.

(5) Recitals 13-17 of the Guidance.

(6) Recital 19 of the Guidance.