Legislation and jurisdiction

Relevant legislation and regulators

What is the relevant legislation and who enforces it?

The EU merger control rules, which apply to large-scale merger and acquisition transactions, are set out in Council Regulation (EC) No. 139/2004 (the EU Merger Regulation (EUMR)). The regime applies to the European Economic Area and the three members of the European Free Trade Association.

The EUMR is enforced by the Directorate-General for Competition of the European Commission (DG Comp) in Brussels. EUMR notifications are reviewed by sector-specific units within DG Comp, which have integrated merger control competence.

In addition to the sector-specific merger units, the Commission’s internal decision-making process involves a number of other stakeholders: the chief economist team and the case support and policy unit (within DG Comp), and the legal service and the sectoral directorates-general (eg, transport and energy) (outside DG Comp).

The Commission also uses peer review panels in Phase II cases to test the validity of the case team’s arguments. The panels comprise a team of lawyers and economists from DG Comp, who are independent of the original case team. In addition, two hearing officers, who are independent of DG Comp and report directly to the competition commissioner, organise and conduct oral hearings in Phase II cases and act as independent arbitrators if a dispute on the effective exercise of procedural rights between parties and DG Comp arises.

The Commission has published a series of notices and guidelines to assist in the interpretation of a number of key issues under the EUMR. These include:


In addition, the Commission has published a number of best practices, including the Best Practices on the Conduct of Merger Proceedings (2004) and the Best Practices for the Submission of Economic Evidence (2011). These and other notices are important reading in all potential transactions. They are available on the Commission’s website (https://ec.europa.eu).

The EUMR is based on the ‘one-stop shop’ principle, whereby once a transaction has triggered notification to the Commission, the national authorities of the member states are precluded from applying their own competition laws to the transaction (except in circumstances in which the Commission refers transactions to the national authorities of the member states). The ability of national authorities to apply other non-competition laws is also circumscribed.

However, member states have tested the ambit of those principles (eg, Hungary in VIG/Aegon, 2022; Spain in E.ON/Endesa, 2006; Italy in Abertis/Autostrade, 2006 and Poland in Unicredito/HVB, 2005).

Scope of legislation

What kinds of mergers are caught?

A ‘concentration’ is defined in the EUMR as a merger of two or more previously independent undertakings (or parts of undertakings) or the acquisition of direct or indirect control of the whole or parts of another undertaking, which brings about a durable change in the structure of the undertakings concerned. The EUMR applies to concentrations that have a ‘Union dimension’ (ie, meet certain turnover thresholds).

What types of joint ventures are caught?

Provided that the applicable turnover thresholds are met, the creation and change of control over full-function joint ventures are caught by the EUMR. A full-function joint venture is an autonomous economic entity resulting in a permanent structural market change, regardless of any resulting coordination of the competitive behaviour of the parents.

Non-full-function joint ventures, such as strategic alliances and cooperative joint ventures (eg, production joint ventures), are not governed by the EUMR but by the rules of the Treaty on the Functioning of the European Union (TFEU) on restrictive practices, notably article 101, which prohibits agreements between undertakings that may affect trade between member states and that have as their object or effect the prevention, restriction or distortion of competition.

According to Council Regulation (EC) No. 1/2003, article 101 of the TFEU can be enforced by the Commission or by national competition authorities; however, non-full-function joint ventures can trigger merger control in a number of member states (eg, Germany and, in some circumstances, Austria) by the acquisition of a minority interest.

Is there a definition of ‘control’ and are minority and other interests less than control caught?

‘Control’ means the possibility of exercising ‘decisive influence’ over an undertaking on the basis of rights, contracts or other means. When outright legal control is not acquired (eg, through the acquisition of shares with the majority of the voting rights), the Commission will consider whether the acquirer can still exercise legal or de facto control over the undertaking through special rights attaching to shares or contained in shareholder agreements, board representation, ownership and use of assets, and related commercial issues.

There is no precise shareholding or other tests for decisive influence and each case is decided on its facts. For example, in News Corp/Premiere (2008), the Commission found that the acquisition by News Corp of a 24.2 per cent shareholding was sufficient to confer on it a de facto majority of the voting rights, resulting in a notifiable concentration; by contrast, in Ryanair/Aer Lingus (2007), a holding of over 25 per cent was deemed not to amount to either de jure or de facto control. See also Electrabel SA v European Commission (2014).

The General Court has also considered the extent to which minority shareholdings come within the scope of the EUMR. Following Aer Lingus’ appeal against the Commission’s decision not to order Ryanair to divest its minority shareholding in the wake of its 2007 prohibition decision, the Court confirmed that the EUMR does not empower the Commission to deal with minority shareholdings, where these do not lead to an acquisition of control under article 3(2) of the EUMR.

Thresholds, triggers and approvals

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

The purpose of the EUMR is to review concentrations that have an EU dimension. The criteria are designed to ensure that only large-scale acquisitions, mergers and joint ventures are caught.

A concentration will be caught by the EUMR where:

  • the aggregate worldwide turnover of all the parties exceeds €5 billion; and
  • the aggregate EU-wide turnover of each of at least two parties exceeds €250 million, unless each of the parties achieves more than two-thirds of its aggregate EU-wide turnover in one and the same member state.


In an attempt to reduce the need for businesses to make multiple applications for clearance at the national level within the European Union, the EUMR also applies to smaller concentrations that have an impact in at least three member states if:

  • the aggregate worldwide turnover of all the parties exceeds €2.5 billion;
  • the aggregate EU-wide turnover of each of at least two parties exceeds €100 million;
  • in each of those member states, the aggregate turnover of all the parties exceeds €100 million; and
  • in each of those member states, the turnover of each of at least two parties exceeds €25 million, unless each of the parties achieves more than two-thirds of its aggregate EU-wide turnover in the same member state.


Turnover is deemed to be the amount derived from the sale of products or the provision of services (excluding turnover taxes) in the preceding financial year. The turnover of the whole group to which the relevant undertaking belongs is taken into account in accordance with detailed tests set out in the EUMR. The calculation can be complex and may involve certain adjustments to the turnover figure in the latest audited accounts, for example, to account for certain recent disposals or acquisitions.

In an acquisition, the turnover of the vendor is irrelevant except for that of the business being acquired. In the case of joint ventures, the whole turnover of the parents and their groups that intend to share joint control of the venture is taken into account.

In addition, there are rules for the calculation of turnover in specific sectors, in particular for banks and other financial institutions and insurance undertakings, as well as principles based on case experience for the geographic allocation of turnover in particular sectors, such as airlines, telecommunications and financial services.

The EUMR establishes a system of referrals to ensure that a concentration is examined by the authority best placed to conduct the assessment (in line with the principle of subsidiarity). Under articles 4(4) and 9 of the EUMR, in certain cases, the national competition authority or the merging parties can request that a transaction that meets the EUMR thresholds be reviewed – in whole or in part – by the national competition authority. For example, in Phoenix/McKesson (2022), the Commission partially referred a proposed acquisition to the French competition authority under article 9 of the EUMR while unconditionally approving the transaction outside France.

By the same token, under articles 4(5) and 22 of the EUMR, provided that certain conditions are met, the merging parties or one or more member states may request the Commission to review a merger that does not meet the EUMR thresholds (eg, Kingspan/Trimo, 2022; Meta (formerly Facebook)/Kustomer, 2021; and Fincantieri/Chantier de l'Atlantique, 2019).

On 26 March 2021, the Commission published a policy paper in which it reported on an evaluation started in 2014 on whether the jurisdictional thresholds in the EUMR leave an enforcement gap and whether the administrative burden on merging firms and other market participants is proportionate. The evaluation found that the current jurisdictional thresholds generally suffice to capture transactions that merit EU review; however, the Commission expressed concern that some ‘killer acquisitions’, especially in the digital and pharma sectors, might have flown under the radar in recent years.

To close this gap, the Commission published guidance on a new policy to encourage and accept referral requests from member states under article 22 of the EUMR, even where transactions do not meet the national merger control thresholds of the referring member states. The first case referred to the Commission under this new policy is Illumina/GRAIL (2021).

The policy paper closes the debate on two topics: the Commission decided not to introduce a transaction value threshold, and the Commission is no longer considering extending the EUMR to capture non-controlling minority shareholdings. It also concludes that the Commission’s latest simplification package was effective in reducing the administrative burden on merging firms but acknowledges that there remains some scope for improvement.

This led the Commission to launch several public consultations on the further simplification of EU merger control procedures (in March 2021 and most recently in May 2022). In its latest consultation, the Commission invited comments on the draft revised Notice on the Simplified Procedure and the draft revised Implementing Regulation.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

Filing is mandatory for concentrations with an EU dimension. There are no exceptions, and the EUMR empowers the Commission to fine undertakings that fail to notify.

In certain circumstances, parties may request that a transaction that meets the EUMR thresholds be referred wholly or partly to a member state.

Do foreign-to-foreign mergers have to be notified and is there a local effects or nexus test?

The EUMR applies to all concentrations that have an EU dimension. Because the turnover thresholds are based on geographic turnover and not on the location or registered office of the parties, even foreign-to-foreign transactions essentially involving non-EU groups are caught if the financial thresholds are met.

Are there also rules on foreign investment, special sectors or other relevant approvals?

The EUMR applies to all transactions that meet the relevant turnover thresholds. There are no sector-specific rules.

Foreign direct investment is governed at the member state level; however, pursuant to a new EU framework regulation for the screening of foreign direct investments that became fully applicable on 11 October 2020, the Commission has the power to issue an opinion when an investment poses a threat to the security or public policy of more than one member state. The new framework enhances the cooperation between the Commission and the member states in their actions on foreign investments.

On 30 June 2022, the European Parliament and the European Council adopted a regulation on foreign subsidies distorting the internal market that seeks to introduce a mandatory notification system for certain subsidised transactions. This represents independent ex ante notification procedure for transactions with dedicated thresholds, timelines and sanctions.

The regulation requires an ex ante notification if:

  • it is a concentration in the form of a change of control on a lasting basis, including full-function joint ventures;
  • the target, merging party or joint venture or one of its parents is established in the European Union and generates an aggregate turnover of at least €500 million in the European Union; and
  • the undertakings concerned received foreign subsidies exceeding €50 million on an aggregated basis over the past three years.


The regulation provides that even if those thresholds are not met, the Commission can still call in any concentration if it suspects that the undertakings concerned may have benefitted from foreign subsidies in the past three years. The procedural rules – including the review periods, penalties and rules on gun jumping – would mirror EU merger control rules.