Axel Schulz supports clients in a broad range of European and German competition law matters, covering merger control, cartels, conduct and general antitrust matters. His recent merger control experience includes advising DIC Corporation and its US subsidiary Sun Chemical in its acquisition of BASF’s global pigments business; Saudi Aramco in its US$69 billion acquisition of SABIC; and Italian pharmaceutical company Angelini in the acquisition of a divestiture package from GSK.

Rebecca Farrington focuses on government merger and non-merger investigations, private antitrust litigation and counselling on antitrust issues. Rebecca has developed a significant track record defending mergers before the US FTC and the DOJ. Her recent experience includes advising DIC Corporation and its US subsidiary Sun Chemical in its acquisition of BASF’s global pigments business; Saudi Aramco in its US$69 billion acquisition of SABIC; and Newmont Mining Corporation in its US$10 billion acquisition of Goldcorp Inc.


Merger control has seen a number of developments in 2021, some related to the repercussions of the covid-19 pandemic and others born out of the ambitions and changes sought by individual competition authorities or unexpected jurisprudence.

After a short period starting in March 2020 during which the European Commission (EC) Directorate General for Competition (DG COMP) recommended that the parties delay their merger notifications where possible, the EC began encouraging companies to submit their notifications via electronic platforms (the Merger Registry or the eTrustEx platform) and things got back to a ‘new normal’. It is thus fair to say that the covid-19 pandemic has had limited impact on merger review activity. The EC’s activity levels are roughly similar to previous years. In the first half of 2021, the EC received 266 notifications, approved four mergers in Phase II with remedies, and was conducting six Phase II investigations as at August 2021. The EC also does not seem to be facing unusual difficulties in collecting data from the merging parties, competitors and customers.

Possibly the most important policy change was in relation to referrals from national competition authorities. In March 2021 and effective from this date, the EC published new guidance on the application of the referral mechanism between member states and the EC under article 22 EUMR. Under this new interpretation of article 22 EUMR, transactions that do not meet notification thresholds anywhere in the EU may be notifiable if they ‘affect trade between Member States’ and ‘threaten to significantly affect competition within the territory of the Member State making the request’. In fact, the EC now encourages national competition authorities to use the referral mechanism even where transactions do not meet the national merger control thresholds of the referring member states. The stated goal of the new policy is to bring to the EC’s attention ‘killer acquisitions’: transactions where incumbent companies might acquire innovative targets to pre-empt future competition before the targets meet relevant turnover thresholds. The article 22 guidance explicitly targets mergers in pharmaceutical and digital markets, but the EC will apply its new practice to any transaction where the target’s turnover ‘does not reflect its actual or future competitive potential’.

This new policy marks a major policy change and has important consequences for deal makers. Any transaction that could be assessed as threatening competition within the EU may now be reviewed by the EC – no matter how small the target, and even after the deal has closed. This impacts deal risk assessment, transaction timelines and deal documentation for certain transactions.

The EC acted swiftly to implement its new approach when, in April 2021, it accepted a referral request to review Illumina’s acquisition of GRAIL, a developer of cancer detection tests. Illumina has lodged an appeal to the General Court seeking annulment of the EC’s decision to accept the referral request, and the outcome of this case will be critical for the success of the EC’s new policy. In addition, despite the fact that the EC opened a Phase II investigation of the transaction in July 2021, Illumina chose to close the transaction in August 2021, and the EC has started an investigation to consider whether the closing constitutes gun-jumping and merits a fine; it has separately issued a Statement of Objections in view of adopting interim measures. This is the first time that the EC intends to adopt interim measures following alleged early implementation.

At the same time as announcing its article 22 change in policy, the EC announced that it was considering the simplification of its review of non-problematic mergers. On 26 March 2021, the EC launched a consultation that explored expanding and clarifying the categories of simplified cases; streamlining the review of simplified cases (by reducing information requirements and pre-notification discussions); streamlining the review of non-simplified cases; and allowing electronic notifications, introduced in response to the covid-19 pandemic, on a permanent basis.

On 22 September 2021, the General Court (in Altice v European Commission (T-425/18)), largely upheld the EC’s decision to fine Altice €124.5 million for gun-jumping and failure to file. This judgment is likely to encourage the EC to continue to take a hard stance against procedural infringements. Deal makers should ensure that pre-completion covenants in the share purchase agreement, in particular any consent or veto rights, are drafted carefully, and do not go beyond what is necessary to preserve the value of the acquirer’s investment or the target’s commercial integrity (and thus constitute illegal early implementation of the transaction). The judgment also highlights the need for transaction parties to have in place robust procedures to ensure that contacts between the buyer and the target, both before signing and between signing and completion, do not lead to gun-jumping infringements.

With respect to the substantive review of mergers, all eyes are on the European Court of Justice’s pending review of the appeal brought by the EC against the General Court’s landmark judgment in CK Telecoms UK Investments v Commission (T-399/16, 28 May 2020). The appealed judgment clarified that the EC must satisfy a high burden of proof in merger decisions. The General Court held that ‘the mere effect of reducing competitive pressure on the remaining competitors is not, in principle, sufficient in itself to demonstrate a significant impact on effective competition’ and underscored that the EC ‘is required to produce sufficient evidence to demonstrate with a strong probability the existence of significant impediments following the concentration’.

On the legislative agenda are two EC proposals for Regulations that will have an impact on merger control, if they pass through the legislative process (which may take several years).

In December 2020, the EC published its proposal for a Regulation on contestable and fair markets in the digital sector (the Digital Markets Act) (DMA), which would also have an impact on merger control. Article 12 DMA obliges the companies formally designated as ‘gatekeepers’ (ie, digital platforms that are perceived to have a significant impact on the internal market, which would be determined based on certain thresholds) to inform the EC of all their proposed acquisitions in the digital sector to the EC, regardless of whether the proposed transaction meets the established EU or member state notification thresholds. The EC would not be empowered to prohibit such transactions notified, but the EC could use the information provided to catch such transactions and encourage relevant member states to refer the transaction to the EC under article 22 EUMR.

In May 2021, the EC published its proposed Regulation on foreign subsidies distorting the internal market, which aims at addressing a perceived regulatory gap with respect to foreign subsidies that give their beneficiary an unfair advantage when acquiring companies active in the EU. The current EU merger control rules do not empower the EC to take foreign funding into consideration. The proposed Regulation would introduce an additional review regime, parallel to the merger control regime under the EUMR, for transactions affected by foreign subsidies that exceed certain thresholds, which will further complicate the process of getting a deal from signing to closing in some cases.

From 1 January 2021, the UK and EU became separate jurisdictions in relation to merger control. Transactions that concern the UK market and have an EU dimension may require parallel notifications to the UK Competition and Markets Authority (CMA) and the EC.

At national level, the activities of the French Competition Authority (FCA) and of the German Federal Cartel Office (FCO) provide a good example of the developments in competition policy and enforcement.

The FCA keeps increasing its focus on the digital sector (in particular on large digital platforms), which is addressed in its top priorities for 2021. The FCA created a Digital Economy Unit in January 2020, aiming to develop in-depth expertise on all digital matters, to contribute to the FCA’s studies and sector-specific inquiries, provide support to investigation units, and work with other domestic agencies as well as foreign competition authorities. Further, the FCA developed a novel approach to market definitions to take better account of online sales in the retail sector. Following the approach in the Fnac/Darty case, the FCA considered in Luderix/Jellej Jouets that the relevant market for retail sales of toys included both in-store and online sales. This approach has been confirmed in the new FCA merger guidelines (introduced in July 2020), which now contain a specific section dedicated to online sales, describing in detail the elements to consider when assessing the substitutability of in-store and online sales.

In Germany, the 10th amendment of the German competition act came into force in 2021, which, inter alia, increased the domestic turnover thresholds from €25 million to €50 million and €5 million to €17.5 million with the aim of reducing the number of filings significantly. At the same time, recent practice has shown a trend to extend Phase II proceedings leading to total review periods of in some cases nine to 12 months. The amendments to the German competition act in early 2021 in fact extend the review periods in Phase II, which shall now be concluded within five months of the filing date (ie, a month longer than before the amendment); this period is automatically extended by one month if the parties offer remedies, and the FCO can further extend it multiple times (without any limitation, but only with the parties’ consent).

In the United Kingdom, the CMA has taken an interventionist approach to merger control. The CMA has not been shy about asserting its competence to review mergers that might appear, at first blush, to fall outside its sphere of influence, with an increasingly flexible approach to share of supply tests. Roche/Spark, Sabre/Farelogix, Amazon/Deliveroo and Facebook/Giphy were all recipients of this flexible interpretation: in all of these cases, the target parties had minimal (if any) UK turnover, but the CMA asserted jurisdiction on the basis of the share of supply test, using frames of reference that the parties considered to be highly questionable. That trend is set to continue, with the new Merger Assessment Guidelines published by the CMA in March 2021 emphasising closeness of competition as a key metric for assessing the competitive effects that a transaction may have, which will give the CMA plenty of room for interpretation. Merger control enforcement in the digital sector is expected to accelerate with the Merger Assessment Guidelines identifying a perceived level of under-enforcement in digital deals by the CMA.

The CMA’s stern approach to merger review is also borne out in the statistics. So far in 2021, the CMA has issued decisions on eight Phase II investigations. Of these, only two have been cleared and four were prohibited (the other two were remitted back). These cases have been across a range of different sectors.

A key UK legislative development has come in the form of the National Security and Investment Act 2021 (NSIA), which will create a mandatory investment screening mechanism in the UK for share acquisitions of targets in any of 17 ‘sensitive’ sectors. The NSIA regime will go live from 4 January 2022, with penalties for failure to notify when required of up to 5 per cent of group global turnover or £10 million – whichever is the greater. The NSIA is already requiring careful consideration before its go-live date as, once in effect, it will give the Secretary of State the power to retrospectively ‘call-in’ for review any deal closed in one of the sensitive sectors from 12 November 2020 that he or she considers could pose a risk to national security in the United Kingdom.

On the other side of the Atlantic, the United States witnessed significant developments in antitrust policy, fuelled by an unprecedented increase in merger filings; an increasingly aggressive stance on merger enforcement under the new Biden administration, particularly in technology, digital and data-related industries; and new proposals in federal and state legislation, as well as executive action.

The US antitrust agencies have experienced a surge in merger filings, with more Hart-Scott-Rodino (HSR) filings anticipated this year than any other year in the past decade. The agencies have responded by implementing a string of policy changes, including the suspension of early termination of the HSR waiting period, the issuance by the US Federal Trade Commission (FTC) of pre-consummation warning letters advising parties that the investigation remains open and that they can close transactions at their own risk, and the revocation of a 1995 policy limiting the US FTC’s use of prior notice and approval provisions in settlement orders, among other changes. Another surprising development was the US FTC’s vote to withdraw the joint agency 2020 Vertical Merger Guidelines, which was only issued last year (the DOJ has still not withdrawn yet).

Consistent with the global trend, US agencies have continued to focus on merger enforcement in the technology, digital and data sectors, particularly when ‘big tech’ companies are involved. President Biden nominated two outspoken critics of big tech, Lina Khan and Jonathan Kanter, to lead the US FTC and the DOJ Antitrust Division, respectively. This was after the agencies had already brought two major lawsuits in the preceding year against Facebook and Google. The US FTC got a second bite at the apple for its complaint against Facebook in August 2021, when it refiled and attempted to cure deficiencies from its initial December 2020 complaint. The US FTC is alleging that Facebook illegally maintained a personal social networking monopoly, pointing to Facebook’s 2012 acquisition of Instagram and 2014 acquisition of WhatsApp.

The Biden administration has made clear that it views competition enforcement as a key priority. On 9 July 2021, President Biden signed the Executive Order on Promoting Competition in the American Economy. The Order proposed many new changes to antitrust enforcement, including increased focus on labour rights, as well as on certain key industries (such as airlines, technology, pharmaceuticals and telecommunications, among others). Congress has also pushed for significant antitrust changes this year, including proposals for key pieces of legislation. For example, Senator Amy Klobuchar (D-MN) introduced the Competition and Antitrust Law Enforcement Reform Act, which would, among other proposals, prevent courts and the antitrust agencies from requiring market definition in certain situations, such as where the record shows an actual, likely or appreciable risk of harm to competition.