On 26 March 2021, the European Commission (“Commission”) published a Staff Working Paper summarising the findings of its evaluation of procedural and jurisdictional aspects of EU merger control (the “Evaluation”), along with a communication providing guidance regarding its change in approach to the use of Article 22 of the EU Merger Regulation (“EUMR”) to refer cases over which neither the Commission nor the member states have jurisdiction (“Guidance”). Additionally, the Commission launched an impact assessment on policy options for further targeting and simplification of merger procedures, inviting stakeholders to submit their views by 18 June 2021.

Evaluation of Procedural and Jurisdictional aspects of EU merger control

The Evaluation, launched in August 2016, was intended to assess the functioning of certain aspects of EU merger control, particularly the effectiveness of (i) the turnover-based jurisdictional thresholds in capturing concentrations that may have a significant impact on competition in the internal market, and (ii) the simplification measures introduced in 2013.

Turnover-based thresholds and the referral system

The Evaluation considered whether potentially problematic acquisitions of high-value target companies with low turnover — including in the digital and pharma sectors — have fallen outside the Commission’s jurisdiction. The Evaluation concluded that the current jurisdictional thresholds, complemented by the referral system, have generally proved effective in capturing such transactions. However, the Commission concluded that  acquisitions of companies with (as yet) low turnover but with significant competitive potential, such as nascent competitors and innovators, including companies in the digital, pharma, biotechnology and certain industrial sectors, were falling outside the EUMR’s turnover-based thresholds.

The Evaluation concluded that, encouraging and accepting more referrals under Article 22 of the EUMR, in particular of transactions that do not meet member state jurisdictional thresholds, may give Member States and the Commission the flexibility to ensure review of concentrations which merit review. The Commission noted that it has adopted a “restrictive approach” to accepting Article 22 referrals to date, thereby limiting its use and effectiveness.

Ten Article 22 referral requests were submitted to the Commission between 2014 and 2020; none were refused. Of these, three were subject to an in-depth investigation, and three were cleared conditionally subject to remedies. No transaction was reviewed under the simplified procedure. The below table summarises all Article 22 referral cases notified between 2014 and 2020 and their respective outcomes:


The Evaluation concluded that the 2013 simplification package was effective in increasing the application of simplified procedures to unproblematic mergers, thereby reducing the administrative burden for the Commission. On the basis of stakeholders responses and the Commission’s enforcement experience, the Evaluation noted potential room for additional expansion of the simplified procedure. The Evaluation also identified scope for reductions in the information requirements for simplified procedure reviews.

Guidance on Article 22 referrals

In light of its findings regarding the use of Article 22, the Commission intends to encourage Article 22 referrals. The Guidance sets out the Commission’s proposed approach to such referrals.

The Guidance notes that there has been a gradual increase in the number of concentrations involving companies that play or may develop into playing a significant competitive role, despite generating little or no turnover.

The Guidance details the categories of transactions which may be suitable candidates for referral where the merger is not notifiable in the referring Member State(s), including transactions involving companies that:

  • are start-ups or recent entrants with significant competitive potential that have yet to develop or implement a business model generating significant revenues (or are still in the initial phase of implementing such a business model);
  • are important innovators or are conducting potentially important research;
  • are actual or potential important competitive force (as identified in paragraphs 37 and 38 of the Horizontal Merger Guidelines);
  • have access to competitively significant assets (such as raw materials, infrastructure, data or intellectual property rights); and/or
  • provide products or services that are key inputs/components for other industries.

In terms of procedure, the Guidance states that the Commission will cooperate closely with authorities in the Member States to identify concentrations that may be potential Article 22 referral candidates. To that end, the Commission may exchange information with national competition authorities. The merging parties may also voluntarily provide information about the intended transaction to enable the Commission to provide an early indication as to whether it considers the concentration to be a “good candidate” for referral. The Guidance also notes that third parties may contact the Commission, or national authorities, to inform them of transactions that might be candidates for referral.


The Guidance confirms a significant expansion in the use of Article 22, making concrete Executive Vice-President Margrethe Vestager’s statement in September 2020 that “we plan to start accepting referrals from national competition authorities of mergers that are worth reviewing at the EU level – whether or not those authorities had the power to review the cases themselves.

The policy change regarding Article 22 effectively means that the competitive effect of every transaction in every Member State needs to be examined, regardless of the size of the transaction.

However, even when such reviews suggest that a transaction is not likely to significantly impact competition, the potential for third parties to suggest transactions for referral, coupled with the short timeframes in which the Commission must decide whether to accept a referral, pave the way for significant legal uncertainty. The Commission and Member States may “call-in” a transaction which does not meet the turnover thresholds for review based on preliminary competition concerns.

Such referrals will impact on the timing of transactions. The Article 22 process commences (i) within 15 working days of the date on which the concentration is made known to the Member State concerned (i.e., the date on which there is sufficient information to preliminarily assess the existence of the criteria for referral), (ii) once the referral request has been made, other Member States may join the request within 15 working days of being informed of the request, (iii) within 10 working days of the expiration of the 15 working day period for Member States to join the referral, the Commission must decide whether to investigate. This process introduces added complexity, if not delays, to deal timelines.

With this in mind, parties should take the potential 40 working day referral process and the potential for Commission investigation into account in their transaction documents and planning process.