Mergers that do not meet the European Commission’s (EC) notification thresholds are still at risk of being called in for review, with the EC actively seeking new cases, according to three Brussels-based competition lawyers.

Since Nvidia challenged the Commission’s new approach to sub-threshold referrals after it accepted Italy’s referral of the called-in Run:ai transaction, the Commission has not reviewed any other deal caught by national qualitative call-in powers.

Despite this, the Commission is still “keeping companies on their toes,” the first lawyer said. “They keep sending requests for information [RFIs] to companies to test the waters for call-in cases in some deals. I’ve seen this happen myself with two clients,” the lawyer added.

Another Brussels-based lawyer agreed that the watchdog continues to make inquiries about cases it thinks are potential candidates for a referral. “I think this is probably still driven by complainants or people expressing concerns,” he said.

“They are still doing it, maybe not to the same frequency that they did it the first year, where we heard that they had sent more than 100 of these Article 22 letters, but for instance I received one quite recently,” he said.

He was referring to the first year after the EC issued its 2021 Guidelines encouraging EU national competition authorities (NCA) to refer under threshold mergers to the Commission. Those guidelines were withdrawn in 2024 after the EC was told it was wrong to accept France’s referral of Illumina’s Grail acquisition. In that case, the EU’s Court of Justice clarified that the EC can only accept referrals when the NCA has its own jurisdiction over the deal.

He said the letter he recently received concerned a deal involving a life sciences company acquiring a startup with a new technology. “It was a deal where we convinced them there was no issue, and at the end they sent us a mail saying we are not going to pursue this further.”

A third Brussel lawyer agreed that the Commission is pursuing potential referral cases, “as a matter of regular practice”. As to what type of cases are most sought after, she highlighted cases in the Big Tech and life sciences sectors.

That lawyer expressed surprise that the Commission rejected the referral request in the Vanderlande case “because I’m on a number of cases where the commission is trying to do the opposite”.

The Vanderlande case involved a completed merger in the airport baggage handling systems (BHS) market, referred by Portugal with the support of Spain and Italy. The Commission rejected the request on 13 May, saying a referral would not be “appropriate” because the transaction had “already been implemented for more than a year.”

“I think they’re trying to be measured and more strategic in how they use [the referral power]”, she said, noting that in the BHS case, the size of the deal (EUR 300mn) might also have been a factor.

Bigger deals subject to review in other major jurisdictions like the US tend to catch the EC’s eye, she said, while smaller deals are lower priority. “We typically tell clients, if it’s below 250, 300, 400 million euros, that is, if you’re below the German or the Austrian thresholds, your chances of having a call-in are very low”.

In addition to the traditional revenue-based merger thresholds, Germany and Austria also have thresholds based on value of a transaction, while Spain and Portugal also have thresholds based on market shares.

Other countries such as Italy, Denmark, Ireland, and Sweden have introduced call-in powers that are at least partly based on qualitative criteria, such as whether a deal entails competition risks in their national market.

EC puppeteering

The second lawyer said that EC letters typically say “we’ve seen this merger, it’s below the thresholds, could you provide information on this, this, and this, in order for the Commission to assess whether it should ask Member States to refer it?”

He cast doubt on the legitimacy of the EC trying to provoke referrals in this way.

“When you see how the Commission is doing this, sending these letters, it looks more and more like a circumvention of what the court said in Illumina. It’s not the member state saying ‘I have jurisdiction, but I want to send it to Brussels’. It’s Brussels orchestrating this and trying to find a member state to refer,” he said.

To back up its legal challenge, Nvidia argued in a court hearing on 11 March that it did not have a problem with EU countries having a call-in system and reviewing sub-threshold mergers themselves. Its problem was with the system to refer these cases to the EC.

“It makes me understand the Nvidia appeal a bit more now,” the second lawyer said. “At first, I thought it was daring, because Italy [the referring NCA] clearly had jurisdiction”.

“I think [the appeal] makes sense if the judges understand that what the Commission is doing is exactly the same [as in Illumina], but on the basis of these call-in powers,” he said.

A spokesperson for the European Commission said it “continues to actively monitor transactions to identify potential killer acquisitions and alert Member States, so that they can either review them at national level or refer them to the Commission. We closely cooperate with national competition authorities to make sure those transactions do not fall through the net. This might lead to a merger review at Member State level, because national filing thresholds are met or the Member State decides to call-in a case if the criteria under national law are fulfilled. It could also lead to an Art. 4(5) – at the request of the merging parties – or an Art. 22 EUMR referral – at the request of the Member States. The decision to call-in a case and subsequently refer it under Art 22 is in the hands of the Member States.”