Dr. Agisilaou’s speech at the 2024 Company Law Conference

Apr 18, 2024 | General

Merger control in the framework of competition law: from past to present



Merger control plays a crucial role in the field of competition law. It is not just a legal obligation for companies but also an essential tool for maintaining the integrity of competitive markets and safeguarding consumer interests. Through the regulation of mergers, competition authorities prevent the formation of market structures that can have adverse effects on consumers, such as higher prices, reduced product quality and choices, and lower innovation.

It is important to note that merger control is a set of rules within the broader framework of competition law. However, unlike certain aspects of competition law that respond to anticompetitive practices after they occur, merger control intervenes proactively before mergers are implemented.

The main objective of merger control has always been to preserve competitive market structures and safeguard the interests of consumers. However, the approaches, analytical frameworks, and legal strategies used to achieve this goal have undergone significant changes over the years. This continuous evolution is critical to ensure that merger control remains effective in promoting competition and consumer welfare, considering the current and anticipated market trends.

The globalization of markets has significantly impacted the way merger control is enforced, particularly due to the complexities surrounding cross-jurisdictional mergers and acquisitions. As a result, competition authorities have adopted more flexible approaches to tailor their regulatory strategies to the specific conditions and legal frameworks of the jurisdictions involved.

Moreover, the expansion of economic borders beyond national borders has highlighted the importance of international collaboration among competition authorities. Such collaboration is crucial for ensuring consistent regulatory standards across borders and effectively addressing the implications of global mergers.

The digital transformation of the economy has led to a critical review of the traditional standards and tools used in merger evaluation. Digital markets, which are characterized by rapid innovation, network effects, and the significant role of data in the production process, pose unique challenges for merger control. As a result, competition authorities have refined their analytical methods, moving away from conventional metrics such as revenue and market dominance to more sophisticated measures. This change allows for a more accurate assessment of the complex effects of mergers and acquisitions within the digital sector.

Having discussed the rationale behind merger control and the importance of consistency and convergence in its application, I will now delve into the evolving landscape of merger regulation within the competition law framework.

The Evolving Landscape of Merger Control

Merger control was established in the early 20th century to counter the monopolistic and oligopolistic trends of the industrial era.

During this period, companies like Standard Oil, led by John D. Rockefeller, engaged in aggressive acquisition strategies to dominate the oil industry. Through a sequence of mergers and acquisitions, Standard Oil achieved almost total control over oil refining and distribution. This development resulted in a monopoly that significantly reduced competition and decreased consumer choice.

Similarly, Carnegie Steel, led by Andrew Carnegie, engaged in mergers and acquisitions to consolidate control over the steel industry. By acquiring competitors and vertically integrating into various stages of the steel production process, Carnegie Steel established a quasi-monopoly position with significant influence over prices and other critical competition parameters.

In addition, during that period, railway and telecommunication companies employed aggressive acquisition strategies to control vast networks of transportation and communication.

These prominent cases illustrate the potential risks associated with unregulated mergers, which can result to anticompetitive market structures in critical industries. In response to these trends, the industrial era marked the inception of a structured regulatory approach to control mergers and acquisitions. The goal of this approach was to preserve competition, promote innovation, and improve economic efficiency.

Over time, the regulatory framework has undergone significant modernization, transitioning from a narrow focus on market concentration to a more comprehensive approach integrating behavioral insights and advanced economic analyses.

At the same time, pivotal legislation and judicial rulings have played a crucial role in shaping merger control towards a more adaptable and sophisticated approach. This ongoing evolution has ensured that merger control remains responsive to the unfolding dynamics of modern markets.

However, despite advancements, significant differences persist in merger control frameworks across jurisdictions due to varying economic objectives and legal foundations. These disparities pose challenges for multinational companies operating globally, leading to uncertainty, which potentially discourages economic growth. This highlights the importance of increased international cooperation and convergence in merger control policies.

Within the European Union, merger control adopts a forward-looking perspective, with the European Commission taking a key role in evaluating mergers that could impact competition in the single market. The European Union’s merger control framework places great emphasis on maintaining effective competition and has been leading in considering mergers’ impacts on innovation and market entry.

Contrary to the European Union’s merger control approach, the United States adopts a more economically focused perspective where the emphasis is on assessing how mergers could potentially harm consumer welfare through higher prices, diminished quality, or reduced innovation. This approach, guided initially by the Sherman Act (1890) and subsequent antitrust laws (such as the Clayton Act (1914) , the Federal Trade Commission Act (1914) and the Hart-Scott-Rodino (1976)), relies heavily on case law and economic analysis to evaluate the impact of mergers on consumer welfare.

Emerging economies worldwide have recognized the importance of incorporating merger control regulations within their competition law regimes. These countries, drawing from a diverse range of influences, have established their own merger control frameworks. For example, China has developed its merger control framework under the Anti-Monopoly Law (AML), reflecting its distinct economic circumstances and market conditions. Similarly, other countries such as Brazil, India, South Korea and South Africa have adopted merger control laws, integrating elements from both the EU and US approaches while adapting them to reflect their specific economic realities and challenges.

The efforts of international organizations such as the International Competition Network (ICN) and the Organization for Economic Cooperation and Development (OECD) have been remarkable in fostering the harmonization of merger control rules. Despite the remaining differences that are driven by national interests and distinct economic priorities, there is a growing recognition of the importance of collaboration in managing cross-border mergers. This includes mainly the exchange of best practices and the development of common approaches for evaluating complex global mergers.

In addition, the European Competition Network (ECN) plays a pivotal role in fostering collaboration among competition authorities within the European Union. The ECN facilitates coordination and information exchange among national competition authorities across EU member states, in order to ensure consistent enforcement of competition law and merger control rules. This collaborative approach enhances the European Union’s capacity to deal with global mergers and maintain competitive markets across different jurisdictions within the European Single Market.

Next, I shall explore the critical components of merger control.

Critical Components of Merger Control

The effectiveness of merger control in maintaining competitive markets depends on several crucial components. An essential component is the thresholds that trigger a review by competition authorities. These thresholds typically rely on financial metrics such as the total revenue or market share of the entities involved in the merger / transaction. However, they may also consider more subtle factors, such as the value of the transaction.

Another crucial component is the substantive test used to evaluate potential adverse effects resulting from mergers.

In particular, the substantive test evaluates various factors, such as the extent of market concentration, the likelihood of unilateral effects such as price increases, the likelihood of coordinated behaviour among market players, the possibility of exclusion of existing competitors, barriers to entry for new competitors, and the impact on innovation and consumer choice. The test also looks at potential benefits of the merger, such as efficiency gains that could enhance consumer welfare.

For instance, the European Union employs turnover thresholds to determine whether a merger requires review before its implementation and applies the Significant Impediment to Effective Competition (SIEC) test to assess the impact of a merger on competition and consumers’ welfare.

This test extends beyond creating or strengthening market dominance. It considers other potential ways through which a merger could diminish competition, particularly within oligopolistic markets or markets with rapidly evolving dynamics. It is important to note that in these market settings a merger may significantly reduce competition and harm consumer welfare if it involves two extensively close competitors.

In contrast, in the United States, merger assessment revolves around ascertaining whether a proposed merger would significantly diminish competition or potentially lead to the establishment of a monopoly in a particular market. This evaluation process is governed by the provisions outlined in the Clayton Act and relies heavily, as mentioned previously, on case law and economic analysis.

Procedural aspects of merger control involve several key steps, including pre-merger notifications, a detailed review process, and, if necessary, the imposition of remedies to mitigate or prevent anticompetitive outcomes. Τhe pre-merger notification requires companies to submit detailed information to the competition authority about the proposed merger before implementing it.

This allows competition authorities to conduct a thorough examination of the merger’s potential impact on competition. If the assessment indicates that the merger would substantially lessen competition or lead to a monopoly (depending on the substantive test applicable in the jurisdiction where the merger is being assessed), the competition authority may intervene, potentially blocking the merger. Remedies may be considered only if they can effectively mitigate the identified anticompetitive risks.

Evidently, both pre-merger notification thresholds and substantive tests play crucial roles in guiding the competition authority’s decision-making process.

I shall illustrate this with reference to a few prominent cases.

An important case was the proposed merger between General Electric and Honeywell in 2001. Although the US Department of Justice approved the merger, the European Commission blocked it because of its concerns that it would establish a dominant position in aerospace markets, potentially suppressing innovation and competition. This case highlights the inconsistent merger control approaches between legal systems and the global implications of conflicting regulatory decisions in major mergers.

Another notable case demonstrating the vigorous enforcement of merger control involves the US Department of Justice’s intervention in AT&T’s attempt to acquire the control of T-Mobile USA in 2011. The Department of Justice (DOJ) argued that the merger would drastically reduce competition in the US telecommunications sector, resulting in higher costs and lower service quality for consumers. In response to these concerns, AT&T withdrew its merger proposal. This development underscores the effectiveness of competition authorities in blocking / discouraging mergers with potentially adverse effects on competition and consumers.

A landmark case that illustrates the rigorous analysis applied by competition authorities to large-scale mergers is the DuPont / Dow Chemical merger. This merger,  announced in December 2015, concerned two of the largest chemical companies worldwide. Both the US Department of Justice and the European Commission approved the merger. However, these approvals came with substantial divestiture requirements to preserve competition and innovation in various market segments. This case highlights competition authorities’ power to impose and enforce remedies to mitigate competition risks.

Another significant case worth mentioning is the European Commission’s decision to block the proposed merger between Siemens and Alstom’s rail businesses in 2019. The European Commission prohibited the merger due to concerns that it would reduce competition in the European railway signalling systems and high-speed train markets.

Current Trends and Future Outlook with a Focus on Digital Markets and Legal Developments

When examining “Merger Control within the Framework of Competition Law,” it becomes clear that the rapid digitization of markets has dramatically transformed the competitive landscape. This transformation calls for a more focused and adaptive strategy to address the unique challenges posed by the digital economy. This includes addressing the strategic acquisition of nascent / emerging competitors by larger companies (a scenario often referred to in the academic literature as “killer acquisitions”).

These acquisitions have the potential to suppress disruptive innovations before they reach the market, thereby reducing future competition. Importantly, traditional metrics such as turnover, which are typically used to determine when mergers must be notified to competition authorities, may not fully capture the competitive impact of these acquisitions. This is because nascent / emerging companies often have disproportionately low turnover relative to their potential market influence or the strategic value they may have for the acquiring company. Hence, regulatory frameworks that rely on turnover thresholds may fail to trigger reviews of these transactions, potentially leading to an enforcement gap.

This observation has recently induced the adoption of transaction value thresholds in certain jurisdictions, such as Germany, Austria and South Korea. In these jurisdictions, a merger that does not meet the conventional turnover thresholds may still require notification if the transaction value, which indicates the target’s company competitive significance, is considerably high.

Additionally, the recent ruling (2022) in the “Illumina / Grail” case by the General Court of the European Union has significantly expanded the interpretation of Article 22 of the EC Merger Regulation 139/2004. if endorsed by the Court of Justice, this ruling would empower the European Commission to review mergers that fall below national notification thresholds upon referral by national competition authorities. This would provide an additional mechanism to address the enforcement gaps related to turnover-based notification thresholds.

Furthermore, the recent ruling (2020)  in the “CK Telecoms” case by the Court of Justice indicates a fundamental change in merger control, particularly in oligopolistic markets. The decision lowered the standard of proof required for blocking a merger. In particular, the Court established that the European Commission only needs to show that a merger is “more likely than not” to significantly impede competition, which is a remarkable departure from the previously higher “strong probability” threshold. It is important to note that in the “CK Telecoms case”,  the European Commission prohibited the proposed merger between Three (a subsidiary of CK Hutchison) and O2 (a subsidiary of Telefonica), two major telecommunications operators in the UK, due to concerns about the potential negative impacts on competition within the UK’s telecommunications market. In particular, the European Commission argued that the merger would significantly reduce the number of major mobile network operators from four to three, which could result in higher prices, less consumer choice, and reduced innovation, considering that the merging parties were very close competitors.

This adjustment to the legal standard of proof empowers competition authorities in the EU to adopt a more proactive approach in assessing mergers that might not appear to harm competition immediately but could have adverse long-term competitive effects. This is particularly relevant when reviewing mergers involving companies in dynamic and interconnected markets, where network effects and data play pivotal roles in shaping competition dynamics.

In addition to substantive assessments, competition authorities place a strong emphasis on procedural compliance during merger control processes. Violations such as gun jumping – where companies prematurely implement a transaction before obtaining the necessary regulatory approvals – or the provision of false or inaccurate information can lead to substantial fines. This strict enforcement is essential for preserving the integrity and effectiveness of the overall merger control framework.

I shall illustrate the implications of procedural non-compliance by reference to two cases.

The first case is “Altice”. Altice, a multinational telecom company, acquired PT Portugal in 2015. Although it notified the European Commission about the transaction, Altice proceeded with the implementation before obtaining the necessary approval. As a result, the European Commission imposed a fine of €125 million on Altice for “gun jumping”.

The second case is “Facebook/WhatsApp”. In 2014, Facebook acquired WhatsApp, a popular messaging app, for $19 billion. During the merger review process, Facebook claimed that it was not feasible to automatically match users’ account data between the two platforms. However, two years later, WhatsApp updated its terms of service to allow data sharing with Facebook, indicating that such data matching was indeed possible. The European Commission fined Facebook €110 million for providing misleading information during the merger review process.


The history of merger control within the framework of competition law underscores the importance of adapting regulatory practices to meet the changing dynamics of global markets. As markets continue to evolve, particularly with the rapid advancements in technology and the expansion of economic borders, it becomes increasingly necessary for merger control frameworks to adjust and respond effectively.

This historical perspective also underscores the necessity for greater consistency in enforcement across different jurisdictions. The globalization and digitization of markets introduce unique challenges that require a more harmonized approach to merger control to mitigate the risks of divergent outcomes for similar transactions across jurisdictions.

By incorporating historical insights into current and future practices, regulators can ensure that merger control continues to serve its fundamental objective of maintaining competitive markets and safeguarding consumer welfare in the years ahead.


Panayiotis Agisilaou

Nicosia, 16.4.2024


[1] While not explicitly focused on merger control, the Sherman Antitrust Act laid the groundwork for antitrust regulation in the United States. It aimed to prevent anticompetitive practices, including mergers that could lead to monopolies or restrain trade.

[2] This act was one of the earliest attempts by the United States to regulate mergers and acquisitions. It introduced provisions to prevent anticompetitive mergers and acquisitions, including mergers that could substantially lessen competition or tend to create a monopoly.

[3] This act established the Federal Trade Commission (FTC) in the United States, which was tasked with enforcing antitrust laws, including those related to mergers and acquisitions. The FTC investigates and challenges mergers that are deemed to be anticompetitive.).

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