This newsletter is a summary of the antitrust developments we think are most interesting to your business. Jaime Rodríguez, counsel based in Madrid, is our editor this month. He has selected:

General

EU foreign subsidies regime: notification obligations kick in

The Foreign Subsidies Regulation (FSR) establishes a new regime, enforced by the European Commission (EC), to regulate subsidies granted by non-EU countries to businesses active in the EU that could distort competition in EU markets.

Importantly, the mandatory, suspensory notification obligations for certain M&A transactions and tenders in public procurements started to apply on 12 October 2023.

Under the transaction review regime, deals must be notified and approved prior to completion if:

• one or more of the merging parties (in the case of a merger), the target company (in the case of an acquisition), or the joint venture (in the case of a JV) is established in the EU and generated an aggregate group-wide turnover in the EU of at least EUR500 million in the previous financial year; and
• the parties were granted combined aggregate financial contributions from non-EU countries of more than EUR50m over the previous three years.

Businesses that participate in public tenders in the EU have to file a notification if the EU public procurement rules (including utilities procurement) apply and:

• the estimated value of the tender or framework agreement is EUR250m or more (or the aggregate value of any “lot” is at least EUR125m); and
• the party (including its subsidiaries and holding companies), as well as its subcontractors and suppliers involved in the same tender, was granted aggregate financial contributions of at least EUR4m per non-EU country within the previous three years.

Parties should now be considering the application of the FSR alongside merger control and/or foreign investment control. If notification is required under the FSR, it will need to be a condition to closing, alongside any other required merger control and/or foreign investment control approvals. The EC encourages parties to engage in pre-notification discussions. According to public statements of the EC’s officials around 20 deals were pre-notified in the run-up to the notification obligation coming into effect, all running parallel to an EU merger control filing.

Our FSR publications provide more detail on how the overall regime will work, the important procedural rules, the implications of the FSR specifically for infrastructure investors and private equity investors, and the FSR’s impact on public procurement procedures. You can also read about proposed amendments to the U.S. merger control notification form to require information on subsidies received from certain foreign governments and related foreign entities in our Global M&A Insights publication.

In addition, earlier this month, Eddy de Smijter, Head of the International Relations Unit, EC, DG Competition, Conor Quigley KC of Serle Court Chambers, and Nicola Mazzarotto, Global Head of Economics at KPMG, joined our partners Kristina Nordlander and Dominic Long to discuss the impact of the FSR on global businesses. You can watch a recording of the panel discussion here and a summary of the key issues discussed here.

Insights on key issues facing private capital

Private capital firms are currently facing a whole host of headwinds. In our new Private capital insights series, we discuss the key trends and topics impacting funds across the private capital spectrum, including:

You can also read thought leadership on many other issues facing private capital investors. Access Private capital insights here.

EU Advocate General reiterates that information exchange can amount to a “by object” infringement

Advocate General (AG) Rantos has delivered a non-binding opinion to the European Court of Justice (ECJ) on the interpretation of the EU prohibition on anti-competitive agreements and the conditions under which an exchange of information between competitors may be classified as a “restriction of competition by object”.

The case currently before the ECJ stems from a 2019 decision of the Portuguese competition authority fining 14 banks a total of EUR225m for having participated in a standalone exchange of sensitive information about the supply of retail banking products between 2002 and 2013.

The authority found the exchange of information constituted a restriction of competition by object, meaning that it did not need to examine its possible effects on the market. The decision was appealed by the banks in the Portuguese court on the ground that the exchange was not sufficiently harmful in itself to alleviate the authority of the need to consider its effects. The referring court then requested a preliminary ruling from the ECJ.

AG Rantos considers that the ECJ should respond that, under EU antitrust rules, a standalone exchange of commercially sensitive information between competitors that reduces or removes uncertainty as to their strategic conduct on the market can amount to a restriction of competition by object.

In reaching his opinion the AG considered: (i) the content of the information exchanged; (ii) the objective purpose of the information exchange (this must be obviously anti-competitive in nature or have no other credible explanation); and (iii) the legal and economic context (limited to what is strictly necessary to confirm or cast doubt over the harmful nature and anti-competitive object of the conduct).

In relation to the case at hand, AG Rantos opined that the sporadic exchange of non-public information on current and future commercial conditions applicable to transactions (in particular, current and future credit spreads and risk variables) may be classified as a restriction of competition by object, notwithstanding the fact it was not associated with the finding of a cartel.

The AG’s recommendations tally with the approach of the European Commission in its revised guidelines on horizontal cooperation agreements, which includes much expanded guidance on the analysis of information exchanges under EU antitrust law. Together, they serve as an important reminder that ‘standalone’ exchanges of information can expose businesses to the risk of fines from antitrust authorities, even in the absence of traditional cartel behaviour (eg pricing or market-sharing agreements).

European Commission report evidences efficient operation of EU foreign investment screening mechanism while plans for revision proceed

The European Commission (EC) has published its third annual report detailing statistics on the screening of foreign direct investment (FDI) into the EU and its Member States in 2022.

This shows that, compared to 2021, a larger proportion of FDI in EU companies was formally screened by EU Member States (55%). However, most of those cases gained unconditional authorisation (86%). Only 9% of decisions involved conditions or mitigating measures and 1% were blocked. 87% of notified cases were closed within 15 calendar days.

Our alert looks at the figures and trends in more detail.

It also considers the consequences of a proliferation of FDI regimes across the EU. The Slovak Republic is one of the latest Member States to introduce new rules. Our separate alert on the Slovak FDI regime drills down into the provisions on scope and procedure and gives our first impressions on dealing with the Slovak Ministry of Economy in practice.

Finally, our alert on the EC’s FDI report delves into EU plans for a revised EU FDI screening regulation as well as a new initiative to address security risks related to outbound investments. We will report again as these proposals crystallise – both are anticipated by the end of 2023.

CMA conditionally clears Hitachi Rail/Thales after revising provisional findings (again)

Following a phase 2 review, the UK Competition and Markets Authority (CMA) has approved Hitachi Rail’s planned acquisition of Thales, subject to structural remedies to address concerns that the deal would impact competition for the supply of digital mainline signalling systems. These signalling systems are used on the UK’s main railway networks.

In response to the CMA’s phase 2 findings, Hitachi Rail offered to sell its mainline signalling business in the UK, France and Germany. The CMA will need to approve the purchaser, and Hitachi’s main customers in these countries must consent to the transfer of the relevant signalling contracts.

The deal has now secured merger control approvals in 12 of 13 jurisdictions. Only the EU remains – the parties withdrew their original filing to the European Commission and recently renotified the transaction at the same time as offering commitments (which we expect are similar to those accepted by the CMA).

In the UK, the Hitachi Rail/Thales case is another example of the CMA revising its provisional findings during an in-depth review, effectively changing its mind about its concerns in relation to the deal. Historically, the CMA has only rarely amended its provisional findings. However, Hitachi Rail/Thales is one of three recent cases where we have seen the authority do this.

In its original provisional findings, the CMA identified antitrust concerns in two markets and indicated that prohibition might be the only effective remedy. It subsequently dropped its concerns in one market (urban signalling) after the parties successfully argued that Hitachi Rail would not be a credible bidder for these services in the UK. Successfully convincing the CMA to alter its provisional view in this market has allowed the parties to save the deal from prohibition and instead offer a more limited structural divestment to obtain clearance.

Similarly, in Copart/Hills Motors, the outcome – an unconditional clearance – was as good as it could get for the parties following a referral of the completed transaction into phase 2. The CMA provisionally found that the deal would be anti-competitive and gave its view that only full divestment of the target would remedy its concerns. Later, however, the CMA obtained new evidence from customers that the target played a less significant role in the market than originally thought. It therefore dropped its concerns altogether and cleared the deal.

An about-turn by the CMA might not always lead to a better ultimate outcome. In Microsoft/Activision Blizzard the CMA issued revised provisional findings, dropping its concerns over the impact of the transaction on gaming consoles. But it still went on to block the transaction on other grounds. As reported in last month’s edition of Antitrust in focus, Microsoft subsequently submitted a new, restructured transaction to the CMA for review, under which the cloud streaming rights to current and future Activision games released during the next 15 years (with the exception of the EEA) would not be acquired by Microsoft, but instead divested to a third party, Ubisoft. The CMA has now approved this revised deal, subject to remedies that ensure the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA.

Despite the Microsoft example, the fact that the CMA appears increasingly willing to narrow the scope of its concerns even after provisional findings at phase 2 highlights the importance of merging parties continuing to make arguments and submitting evidence in favour of the deal right to the end.

More broadly, the data on CMA phase 2 outcomes in 2023 are striking. So far this year, 50% of concluded in-depth reviews have resulted in unconditional clearances (four of eight cases), compared to 25% or less in the past three years. This looks unlikely to change significantly before the end of the year. We will keep you updated on any major developments.

U.S. DOJ incentivises disclosure of criminal misconduct in M&A with new safe harbour

The Deputy Attorney General of the U.S. Department of Justice (DOJ), Lisa Monaco, has announced a new safe harbour policy for voluntary self-disclosures made in the context of mergers and acquisitions. The aim is to incentivise acquirers to disclose criminal misconduct by target companies that they uncover during the M&A process, without fear of prosecution.

The policy will apply across the DOJ’s work, including in relation to potentially criminal antitrust conduct. But it will not impact civil merger control enforcement.

To benefit from the safe harbour, acquirers must report misconduct of the target within six months of closing (whether the misconduct was discovered pre- or post-acquisition). They then have one year to fully remediate the misconduct.

Importantly for acquirers, the presence of aggravating factors at the target company (such as senior management involvement) will not rule out the safe harbour. Nor will the acquirer be viewed as a recidivist in any future criminal case.

The DOJ’s new policy will have a tangible impact on buyer due diligence and post-transaction integration. Wherever there is a potential U.S. nexus, companies should take this safe harbour into account when determining the appropriate breadth and depth of due diligence.

Find out more about the safe harbour in our alert.

Digital & TMT

Cloud services subject to in-depth UK market review and increasing scrutiny in other jurisdictions

The UK Competition and Markets Authority (CMA) has launched an in-depth probe into the supply of public cloud infrastructure services in the UK. It follows a report by communications regulator Ofcom that identified features of the UK market that could limit competition. Ofcom asked the CMA to carry out further investigations.

Cloud services allow remote access to computing resources such as processing, storage, networking and software. Such services are vital for many businesses across the UK and are being rapidly adopted.

Ofcom found that Amazon Web Services and Microsoft are the leading providers of cloud infrastructure services in the UK with a combined market share of 70-80% in 2022. Google is their closest rival, with a share of 5-10%. Together, they are known as the “hyperscalers”.

Ofcom’s main concern is that business customers find it difficult to switch cloud provider or to use multiple providers. It says this is due to three features of the market:

• Egress fees: charges that customers pay to transfer their data out of a cloud – they can discourage the use of more than one cloud provider and may make switching more costly
• Technical barriers to interoperability and portability: the additional effort needed to reconfigure data and applications to work on different clouds can restrict the ability of customers to combine services across cloud providers or to change provider
• Discounts: the structure of these can incentivise customers to use a single cloud provider for all or most of their needs

Ultimately, Ofcom is concerned that, if these features are “left unchecked”, competition could deteriorate and it could become harder for competitors to gain scale and effectively challenge Amazon Web Services and Microsoft.

The CMA will now further examine the UK cloud services market to determine if competition is working well, and what action should be taken to address any issues it finds. The authority has published its issues statement, noting it will consider the three market features identified by Ofcom, as well as look into software licensing practices.

Elsewhere, scrutiny of cloud services is mounting.

Late last month, the French Competition Authority carried out a dawn raid on the back of its cloud computing market study, published in June. The authority is carrying out preliminary investigations based on its findings in the market study and will potentially use these to initiate enforcement action. The Japanese Fair Trade Commission has also reportedly carried out a dawn raid against a cloud service provider in recent weeks. In the past year the sector has been under review in the Netherlands and South Korea.

It is therefore clear that the cloud services market is high on the agenda for a number of antitrust authorities across the globe. As for the CMA’s market investigation, we are unlikely to see the results for another 18 months – the deadline for the final report is April 2025 (and even this date might be extended). In the meantime, the Digital Markets, Competition and Consumers Bill may have become law, more generally providing a framework for the CMA’s work in digital markets.

Energy

European Court of Justice provides clarification on assessment of non-compete agreements between companies active on different markets

The European Court of Justice (ECJ) has provided guidance on whether non-compete agreements between companies operating on different product markets can be considered a “by object” restriction of competition.

The case stems from a 2017 decision by the Portuguese competition authority fining electricity distributor Energias de Portugal (EDP), retailer MC retail (formerly Sonae), and MC retail’s subsidiary a total of EUR38.3m for entering into a non-compete arrangement. Under the agreement, EDP and MC retail granted rebates to their common customers and committed not to enter each other’s market or conclude similar discount agreements with each other’s rivals.

The Lisbon Court of Appeal asked the ECJ for guidance. The ECJ focused mainly on three issues, ie (i) in what circumstances companies active on separate product markets can be considered potential competitors; (ii) whether the non-compete clause in the agreement in question could be considered a by object restriction; and (iii) whether a non-compete clause can constitute an ancillary restraint to a broader commercial agreement.

1. Potential competition

The ECJ held that a company managing a network of consumer product retailers can be considered a potential competitor of an electricity supplier if it is demonstrated that “there are real and concrete possibilities for that undertaking to enter that market and compete with that supplier”.

The ECJ also gave some guidance on factors which may be taken into account for the purpose of identifying potential competition. This would include, for example, activities of the other companies of the group, the company’s earlier activities on the related markets and even the fact that the parties entered into a non-compete agreement.

2. A by object restriction

The ECJ held that market-exclusion agreements (like market-sharing agreements) can be considered by object restrictions since they have in themselves the object of eliminating potential competition and keeping the potential competitor outside the market. Also, the court said that the mere existence of pro-competitive effects is not sufficient to rule out a by object infringement. The by object qualification can be ruled out only if the effects are “demonstrated, relevant, specifically related to the agreement concerned, sufficiently significant, and that they justify a reasonable doubt as to whether that agreement caused a sufficient degree of harm to competition”.

In this case, the ECJ underlined that the referring court should take into account that the non-compete agreement was entered into in the final phase of the liberalisation of the market for the supply of electricity in Portugal.

3. Ancillary restraint

The ECJ said that the non-compete clause could only be considered ancillary to the main commercial agreement if the clause is objectively necessary for the implementation of that agreement and is proportionate to its objectives.

The ruling follows other recent ECJ judgments which highlight the importance of the legal and economic context in assessing the anti-competitive nature of a given conduct. In relation to the exchange of sensitive information, the court may well rule soon along the same lines if it follows the Advocate General in his opinion (see our article above).

Life Sciences

European Commission sanctions first ever pharmaceuticals cartel and scores victory in pay-for-delay appeal

Two antitrust developments in the pharmaceutical sector stand out this month.

1. Cartel settlement

The European Commission (EC) has fined five pharmaceutical companies a total of EUR13.4 million for participating in a cartel concerning N-Butylbromide Scopolamine/Hyoscine (SNBB) – an active pharmaceutical ingredient (API) used to produce the abdominal antispasmodic drug Buscopan and its generic versions.

This marks the first time that the EC has sanctioned companies for participating in a cartel in the pharmaceutical sector and in relation to an API.

The participants were either producers or distributors of SNBB. According to the EC, between 2005 and 2019 they coordinated and agreed on the minimum sale price of SNBB to distributors and generic drug manufacturers. They also agreed to allocate quotas and exchanged commercially sensitive information.

Each of the fined companies confirmed its involvement in the cartel and agreed to settle the case. A sixth received full immunity from fines after reporting the conduct to the EC. Proceedings are ongoing against another company that decided not to settle.

Notably, the EC announced that it cooperated with the Swiss and Australian antitrust authorities during the investigation. This confirms an ongoing global trend for agencies to coordinate on antitrust cases.

2. Pay-for-delay ruling

Outside the cartel sphere, this month we also saw the General Court uphold the EC’s decision to fine Teva and Cephalon for a “pay for delay” pharmaceutical patent settlement agreement.

In 2020, the EC found that Teva and Cephalon (now Teva’s subsidiary) agreed to delay the market entry of a cheaper generic version of Cephalon’s drug for sleep disorders, modafinil, after its main patents had expired (read more in our alert). Under a patent settlement agreement, Teva committed not to enter modafinil markets in exchange for a package of commercial side-deals and some cash payments. As a result, Teva was eliminated from the market and Cephalon continued charging high prices for its drug.

The EC fined the companies a total of EUR60.5m. Teva and Cephalon appealed the decision, arguing that the EC had made legal and factual errors by characterising the settlement agreements as a restriction of competition.

The General Court found that the EC had not erred in the legal tests that it applied. In particular, the court:

• ruled that the EC correctly established that each of the commercial transactions had no other purpose than to induce Teva to agree to the restrictive clauses
• rejected the companies’ arguments that the settlement agreement allowed Teva to enter the market before the expiry of Cephalon’s secondary patents linked to modafinil, and therefore had pro-competitive effects – the court agreed with the EC that Teva’s entry to the modafinil markets must be characterised “as a delayed, controlled and limited entry”
• confirmed, following previous case law, that EU antitrust rules are designed to protect not only existing competition, but also potential competition and potential restrictive effects on competition may be considered as long as they are “sufficiently appreciable”
• dismissed the companies’ arguments that no fines should have been imposed – the court was clear that the companies “could not have been unaware of the fact that entering into the settlement agreement, in so far as it contained non-compete and non-challenge clauses, was problematic under EU competition law”

Together, these cases put pharmaceutical companies on notice that antitrust enforcement in the sector remains a priority for the EC. Commenting on the EC’s cartel decision, Commissioner Reynders highlights the importance of the sector, noting that “competition is essential to provide access to affordable medicines”.

European Commission orders Illumina to unwind GRAIL acquisition

There have been many unprecedented developments in the merger control saga of Illumina/GRAIL. The latest step is an order by the European Commission (EC) for Illumina to unwind the transaction.

This comes just over a year after the EC prohibited the deal. The authority concluded that the transaction would harm competition, stifle innovation and reduce choice in the emerging market for blood-based early cancer detection tests. This was the EC’s first prohibition based solely on vertical concerns and the first time it had blocked a deal that did not meet the EU merger control thresholds (Illumina/GRAIL was referred to the EC for review under the revised Article 22 policy).

A complicating factor for the EC was that the deal had already completed – the parties closed while the EC’s in-depth investigation was ongoing. This led to a record-breaking fine for gun-jumping (see here for our commentary). It also meant that the EC had to determine the best way to restore the situation to its pre-merger state.

The EC has adopted “restorative measures”. These involve:

• Divestment measures requiring Illumina to unwind the deal. The dissolution of the transaction must restore GRAIL’s independence from Illumina to the same level as before the acquisition and ensure GRAIL is as viable and competitive as it was before the deal. Illumina can choose the method of divestment (eg a trade sale or capital markets transaction) but must execute it “within strict deadlines and with sufficient certainty” and with the EC’s approval. Illumina has confirmed that it has 12 months to divest GRAIL, with a possible three-month extension.
• Transitional measures to ensure that, before Illumina has dissolved the transaction, Illumina and GRAIL remain separate and Illumina continues to fund GRAIL to allow it to further develop and launch its new early cancer detection test. These obligations replace interim measures imposed by the EC after the parties completed the deal.

If Illumina fails to comply with the restorative measures, it will face fines of up to 10% of global turnover and periodic penalty payments of up to 5% of average daily aggregate turnover.

Despite the finality of the EC’s order, the case is far from concluded.

The parties continue to challenge whether the EC had jurisdiction to review the transaction (their appeal is now being considered by the European Court of Justice (ECJ)). Several other appeals, including against the EC’s prohibition decision and the gun-jumping fine, are also pending. In the U.S., the parties are appealing the Federal Trade Commission’s order to unwind the transaction.

Illumina has confirmed that if it is not successful with either its ECJ jurisdictional appeal or in a final decision of the U.S. Fifth Circuit Court of Appeals, it will divest GRAIL. In fact, it says it “has already begun the preparatory work necessary for divestment, if needed”. It remains to be seen whether there will be any conflict between the speed at which the courts move and the “strict deadlines” for dissolution of the transaction requested by the EC.

Sustainability

Final UK guidance on environmental sustainability agreements will help businesses legitimately engage in green cooperation

The UK Competition and Markets Authority (CMA) has published its final guidance on how UK antitrust rules apply to green cooperation agreements between competitors (UK Green Guidance).

The UK Green Guidance:

• gives businesses an important steer – including through a number of examples – on which types of green cooperation are unlikely to infringe UK antitrust law and which agreements may be anti-competitive but nevertheless permitted due to the benefits they create
• contains detail on some crucial issues on which antitrust regulators have differed internationally, including the ability of institutional investors to enter into agreements about the promotion of green policies in their investment companies
• describes the CMA’s more permissive approach to “climate change agreements”, allowing parties to justify such cooperation based on a wider range of benefits flowing from the cooperation to UK consumers in general (this is in contrast to the position of the European Commission (EC) and positions the CMA among the more ‘cooperation-friendly’ antitrust authorities)
• sets out the CMA’s “open door policy”, under which it will give informal advice on how the UK Green Guidance may apply to a particular collaboration or initiative
• explains the CMA’s intended approach to enforcement – businesses will not face CMA enforcement action if they follow the principles in the UK Green Guidance, and will receive protection from enforcement and/or fines (including protection for directors from disqualification orders) if they approach the CMA for informal guidance

Our alert takes you through the UK Green Guidance, highlighting its benefits for businesses and the challenges they are likely to face. We also comment on developments in other jurisdictions, including the Netherlands, where antitrust authorities have issued policies in this area. In particular, we compare the UK Green Guidance with the EC’s guidelines on sustainability cooperation – while the two are in many respects aligned, the differences between them will be crucial for businesses with operations across the UK and EU that are seeking to engage in green cooperation.

Sustainability starts to play a role in merger review processes

Recent merger proceedings from across the world demonstrate the increasing importance of sustainability goals in merger reviews.

In Asia Pacific, the Australian Competition and Consumer Commission (ACCC) for the first time conditionally cleared a transaction on environmental benefits grounds. The deal concerns the proposed acquisition of Origin Energy by Brookfield (a Canadian asset manager) and MidOcean (a liquefied natural gas company). Following two interdependent transactions, a Brookfield-led consortium will own Origin’s energy markets business, including Origin’s electricity generation and electricity and gas retail businesses, while MidOcean will own Origin’s upstream gas interests.

The ACCC’s antitrust concerns (“public detriments”) primarily related to the fact that the transaction would lead to vertical integration in the electricity supply chain in Victoria and a resulting potential for discrimination. Following the transaction, Brookfield will control AusNet, which owns significant energy network infrastructure in Victoria, and Origin’s current and expected future generation assets in the state. The ACCC was particularly concerned that Brookfield could influence AusNet to obstruct rival generators from connecting to the transmission grid or operate the transmission network to favour Origin’s generators.

Despite these concerns, in a “finely balanced” assessment, the ACCC concluded that sustainability-related public benefits to Australia’s renewable energy transition would outweigh the public detriments. ACCC Chair Gina Cass-Gottlieb said that “the acquisition will likely result in an accelerated roll-out of renewable energy generation, leading to a more rapid reduction in Australia’s greenhouse gas emissions”.

In addition, the ACCC concluded that some mitigating factors will limit obvious or extreme discrimination. These include the Australian Energy Market Operator’s planning and connection roles, the role of minority investors in the relevant entities and enforceable undertakings given by Brookfield and AusNet.

In Europe, the European Commission (EC) is also increasingly dealing with sustainability-related aspects in merger control. This is clearly articulated in the EC’s Competition Merger Brief (Issue 2/2023, September), where EC staff note relevant recent decisional practice.

In relation to market definition, the EC considers customers’ preferences for sustainable products when defining markets or identifying potential market segments. For example, in Norsk Hydro/Alumetal, the EC considered whether, due to customer preferences, low-carbon aluminium foundry alloys were a separate market from non-carbon alloys, ultimately leaving the market definition open.

Throughout the competitive assessment, the EC uses sustainability as a “parameter of differentiation” when assessing how closely merging parties compete with their competitors. In Sika/MBCC, when considering the closeness of competition, the EC found that the parties were both strong innovators, including on green research and development. The EC may also assess merger-specific sustainability-related efficiencies as it did in 2020 when reviewing Aurubis’s acquisition of copper scrap recycler Metallo.

Remedies are another area where sustainability plays a role. Although the EC has no mandate to “unilaterally impose or choose the ‘greenest’ remedy”, this does not mean that remedies cannot bring positive effects for the environment. For example, in GE/Alstom, the remedy taker successfully finalised the development of Alstom’s more energy-efficient gas turbines and even went beyond Alstom’s initial plans by rendering the turbines hydrogen-ready.

Finally, the EC is vigilant in relation to killer acquisitions involving “green” innovators, which may fall below EU or national notification thresholds. In the EC’s view, its revised Article 22 EUMR referral policy aims to address such scenarios.

Looking forward, as countries work to meet their green transition targets, we expect sustainability and environment policies and arguments to feature more heavily during merger control reviews across all industries. As in Brookfield/MidOcean/Origin, they could be determinative. However, it is likely that antitrust authorities will not necessarily stay in step, for example on whether to accept sustainability efficiency arguments or favour “greener” remedies. We will keep you updated as cases get decided.