On 7 September, the event “Modernising Merger Control for an Evolving World” was held by the Organisation for Economic Co-operation and Development (OECD) and the European Commission.
The conference was opened by Carmine Di Noia, Director for Financial and Enterprise Affairs at the OECD, and Teresa Ribera, Executive Vice-President of the European Commission for a Clean, Just and Competitive Transition. Three panel discussions then explored key public policy priorities concerning efficiencies, scale, market power, and merger control in dynamic economic environments. The event concluded with remarks from Guillaume Loriot, Deputy Director-General responsible for mergers at the European Commission’s Directorate-General for Competition (DG COMP).
Growing international consensus on the need to modernise competition frameworks
In his opening remarks, Carmine Di Noia highlighted the shift taking place across OECD jurisdictions towards updating competition frameworks so that they better reflect evolving competitive dynamics. In this context, an increasing number of jurisdictions are reviewing their merger control regimes to incorporate elements such as dynamic efficiencies, the specific features of digital markets, and the impact of innovation.
Nevertheless, important questions remain regarding the evidence required to substantiate efficiency claims and how to integrate effects that extend beyond competition considerations into the analysis. Di Noia emphasised the OECD’s role as a forum for advancing discussions on these issues and moving towards a common analytical framework that would enable these emerging concepts to be assessed consistently across jurisdictions.
In this regard, the revision of the European Union’s Horizontal Merger Guidelines, whose draft text was subject to consultation in June and whose final version is expected before the end of the year, represents a significant case study for elevating the debate to an international level, reflecting the needs of an increasingly dynamic and interconnected global economy.
The European Union as a benchmark in the evolution of competition policy
In her intervention, Teresa Ribera stressed the need for Europe to provide an environment in which companies can compete, invest, and innovate. As she stated,“we need competition that drives competitiveness.”
To this end, the European Commission has developed, within the revised draft Guidelines, a new approach to assessing efficiencies based on the “Theory of Benefit.” This framework aims to provide clearer guidance on how the genuine economic benefits generated by a transaction can be taken into account to offset competition concerns identified under established “Theories of Harm.” The Commission has also introduced a new tool known as the “Innovation Shield,” designed to ensure that start-ups have genuine opportunities to grow and compete, while preventing acquisitions aimed at eliminating potential competitors, commonly referred to as killer acquisitions.
However, Ribera acknowledged that, despite the progress achieved, several aspects still require further development. In particular, she identified four areas where the draft text needs refinement: (1) clarifying what reslience means both for individual companies and for the european market as a whole; (2) determining more precisely how scale can either support or harm competition through a case-by-case assessment; (3) determining more precisely how scale can either support or harm competition through a case-by-case assessment and (4) providing clearer guidance on the evidence companies may submit to demonstrate the existence of dynamic efficiencies.
In the closing session, Guillaume Loriot also shared his views on the areas where DG COMP continues to work, drawing on contributions received during the public consultation. These include: (1) establishing clearer and more objective limits for analysing dynamic effects; (2) designing an Innovation Shield mechanism that is as predictable and meaningful as possible for businesses and competition authorities; (3) refining the analytical framework used to assess the balance between potential restrictive effects and merger-generated efficiencies, particularly where these materialise over different time horizons or affect different dimensions of competition.
DG COMP’s objective is therefore to develop robust Guidelines underpinned by an analytical framework capable of considering all relevant competition parameters as well as the dynamic efficiencies generated by a transaction.
Conclusions
The event highlighted the broad consensus among OECD jurisdictions on the need to move towards a merger control framework that incorporates long-term dynamic effects.
The European Union currently stands out as one of the most significant examples of the ongoing evolution of competition policy. It remains to be seen how these ideas will be reflected in the final version of the Guidelines and how the outstanding issues within the European Commission will ultimately be resolved.
Telefónica responded to the second consultation on the EU Merger Guidelines, recognising the substantial progress achieved by the European Commission while also proposing improvements in areas where further refinement is still needed.
If the European Commission succeeds in effectively implementing its new competition policy approach, the European Union will be better positioned to strengthen the competitiveness of its businesses, stimulate investment and innovation, and support economic growth.
