The European Commission’s Draft Merger Guidelines: Considerations for Technology, Pharmaceutical, and Life Sciences

On 30 April 2026, the European Commission (the Commission) published its Draft Merger Guidelines (the Draft Guidelines) for public consultation. The Draft Guidelines are intended to replace the 2004 Horizontal Merger Guidelines and the 2008 Non-Horizontal Merger Guidelines with a single, consolidated framework for the assessment of concentrations under the EU Merger Regulation. The consultation is open until 26 June 2026, and the final text is expected to be adopted in Q4 2026.

The substantive legal test is unchanged, namely the Commission must assess whether a concentration would significantly impede effective competition (SIEC), in particular through the creation or strengthening of a dominant position. The Draft Guidelines, however, articulate the Commission’s analytical framework in a more explicit and forward-looking manner, drawing on two decades of decisional practice and case law from the EU Courts. In doing so, they bring greater prominence to themes that have animated recent enforcement, including innovation, ecosystems, scale, resilience, and the non-price dimensions of competition.

This note summarises the principal features of the Draft Guidelines and considers their implications for transaction planning. Our observations may be summarised as follows.

First, the Draft Guidelines codify, rather than reformulate, the Commission’s existing approach but consolidate it within a single effects-based framework structured around theories of harm and a corresponding “theory of benefit.”

Second, the Draft Guidelines acknowledge, more openly than their predecessors, that scale, innovation, investment, and resilience may constitute pro-competitive factors while making clear that the Draft Guidelines do not introduce an industrial-policy exemption.

Third, the Draft Guidelines are likely to be felt most acutely in technology and life sciences transactions, where the Commission’s increasingly dynamic approach to ecosystems, entrenchment, potential competition, and innovation may materially affect risk assessment.

Fourth, the Commission’s emphasis on contemporaneous internal documents, long-term incentives, and the future evolution of markets reinforces the need for parties to align internal documentation, efficiencies analyses, and theories of benefit from the outset of a transaction.

A Consolidated, Effects-Based Framework

The Draft Guidelines retain the SIEC test as the substantive standard of review but recast the Commission’s analysis within a single effects-based framework applicable to horizontal, vertical, and conglomerate effects alike. The assessment remains forward-looking, comparing the likely future market conditions with and without the merger. The Commission must establish, on the basis of an overall assessment of the evidence, that an SIEC is more likely than not.

The Draft Guidelines confirm expressly that there is no hierarchy between qualitative and quantitative evidence. The Commission may rely on either form, depending on the circumstances, and may, in principle, rely on a single item of documentary evidence where its probative value is sufficiently strong. Internal documents prepared close in time to the relevant events continue to carry particular weight, while documents produced after the announcement of a transaction are treated with considerably greater scepticism.

Scale, Competitiveness, and the “European Champions” Question

The Draft Guidelines address more directly than their predecessors the long-running debate over whether EU merger control should accommodate consolidation aimed at enabling European firms to achieve global scale. The Commission acknowledges that scale, innovation, investment, and resilience may constitute pro-competitive factors where consistent with the overall assessment of effective competition. The language is noticeably more receptive to arguments grounded in global competitiveness and strategic autonomy, though carefully bounded.

The Draft Guidelines identify three categories of transaction that may be relevant in this context: (i) mergers combining complementary capabilities to drive innovation and technological progress, generate R&D synergies, or accelerate access to scarce talent and critical resources; (ii) mergers facilitating market integration and global competitiveness, including by enabling expansion across member states without significant overlaps or by allowing firms to achieve the scale necessary to compete with powerful global incumbents; and (iii) mergers strengthening security and resilience, including through investment in critical infrastructure, secure access to essential inputs, or enhanced EU defence readiness.

The outer limits remain firmly in place. The Draft Guidelines do not introduce an industrial-policy exemption, and scale alone does not offset an SIEC finding. Where a transaction generates significant head-to-head overlaps within the EEA, efficiencies must continue to satisfy the established requirements: They must be verifiable, merger-specific, and passed on to consumers.

Technology Mergers: Ecosystems, Entrenchment, and Potential Competition

The Draft Guidelines consolidate a decade of evolving enforcement practice in the technology sector into a more formal doctrine centred on ecosystems, data accumulation, network effects, and entrenchment. Transactions involving platforms, AI capabilities, cloud infrastructure, digital advertising, cybersecurity, and data-rich services are likely to face closer scrutiny, even where current overlaps appear limited on conventional market-share metrics.

Particular attention is likely to fall on acquisitions of emerging or adjacent businesses that strengthen an incumbent ecosystem. Under the entrenchment framework articulated in the Draft Guidelines, the Commission may examine not only whether the target competes directly with the acquirer today but also whether its assets, including users, datasets, interoperability layers, developer relationships, distribution channels, or AI capabilities, reinforce structural barriers to entry over time.

The Draft Guidelines also materially expand the scope of potential competition theories of harm. A target with limited current revenues but credible future competitive significance may therefore attract scrutiny disproportionate to its present market position.

Pharmaceutical and Life Sciences Mergers: Innovation as the Central Inquiry

The implications of the Draft Guidelines for the pharmaceutical and life sciences sectors are at least as significant. The Draft Guidelines formalise an innovation-centric approach that the Commission has progressively developed in prior practice and extend it more systematically across sectors and stages of development.

Pipeline overlaps and innovation incentives are likely to become central features of review. The Draft Guidelines make clear that an SIEC may arise not only where an existing marketed product is affected but also where a transaction weakens the broader innovation process. Early-stage assets, pre-clinical programs, and overlapping research trajectories may therefore attract scrutiny even in the absence of near-term commercialisation.

The explicit treatment of both “killer acquisitions” and “reverse killer acquisitions” is particularly significant for pharmaceutical M&A. Acquisitions of smaller biotechnology or platform companies are likely to be examined through the lens of whether the target’s innovation program could be slowed, redirected, or discontinued post-transaction.

Implications for Transaction Planning

The Draft Guidelines remain subject to consultation and may evolve before final adoption. The broad direction of travel, however, is already clear. Merger review is becoming even more evidence-intensive, forward-looking, and concerned with dynamic competition, namely innovation, data, ecosystems, resilience, and strategic positioning. The Commission is likely to place greater weight on internal documents, long-term incentives, and the future evolution of markets rather than on static market shares or short-term pricing effects.

For parties contemplating transactions in the EEA, this has a number of immediate practical consequences. Contemporaneous documents are likely to carry decisive weight. Deal teams should ensure that strategic rationales, ordinary-course business documents, and post-deal planning materials are aligned with the transaction’s theory of benefit from the outset. Efficiencies analyses can no longer be assembled reactively. They should be developed early, supported by credible evidence, and integrated into both deal documentation and external advocacy. In technology and life sciences, parties should anticipate engagement with ecosystem, entrenchment, potential competition, and innovation theories of harm, even where conventional market-share analysis suggests limited concern. Where a transaction implicates resilience, critical infrastructure, or strategic autonomy, those considerations should be presented as part of a structured competition analysis rather than as standalone policy arguments.

Next Steps and Outlook

The Draft Guidelines now enter a consultation phase that is likely to attract substantial engagement from industry, member states, national competition authorities, and the wider antitrust community. The principal milestones over the coming months are as follows:

1. Interested parties may submit written comments on any aspect of the Draft Guidelines until 26 June 2026. Submissions are likely to focus, in particular, on the formulation of the entrenchment and ecosystem theories of harm, the treatment of potential and innovation competition, the scope of the “theory of benefit” framework, and the standard of proof applicable to forward-looking assessments.
2. The Commission has indicated that it will hold targeted workshops and bilateral discussions with stakeholders during the consultation period. Companies whose transactions are most likely to be affected, in particular those active in digital, AI, life sciences, energy and defence-related sectors, may wish to consider whether direct engagement is appropriate, either individually or through trade associations.
3. The Commission is expected to publish a revised text taking account of consultation responses, followed by final adoption, which is expected in Q4 2026. While the substantive architecture of the Draft Guidelines is unlikely to change materially, refinements to specific theories of harm, the articulation of efficiencies, and the treatment of evidence remain plausible.
4. Importantly, the Commission is likely, in practice, to begin reflecting the analytical approach of the Draft Guidelines in cases under review well before formal adoption, as has been its pattern with previous guideline revisions. Parties currently in pre-notification or Phase I review should expect questions, requests for information, and theories of harm to be framed in terms consistent with the Draft Guidelines.
5. The Draft Guidelines should also be read alongside other ongoing developments shaping EU merger control, including the Commission’s reflections following the Illumina/Grail judgment on below-threshold transactions, the continued operation of the Digital Markets Act, the Foreign Subsidies Regulation, and an increasingly active set of national FDI regimes. The cumulative effect is a notably more complex regulatory environment for cross-border M&A.

Looking further ahead, the Draft Guidelines are best understood not as the endpoint of a reform process but as a consolidation of the analytical direction that EU merger control has taken over the past decade. The Commission’s emphasis on dynamic competition, innovation, and ecosystem effects is likely to deepen rather than recede, and decisional practice in the years following adoption will shape how the Draft Guidelines are applied in concrete cases, particularly in areas such as ecosystem entrenchment and the “theory of benefit,” where the text leaves the Commission meaningful interpretative latitude.

We will continue to monitor the consultation and the development of decisional practice under the Draft Guidelines, and we stand ready to assist with their application to specific transactions, the preparation of consultation submissions, and broader strategic planning for transactions likely to be reviewed under the new framework.