Key points

• Merger control in Europe is no longer only about turnover thresholds. Several national authorities and the UK Competition and Markets Authority (CMA) can review deals that do not meet them.
• The UK has jurisdiction on a share of supply test as well as a turnover test, and the Digital Markets, Competition and Consumers Act 2024 added a hybrid test and raised the turnover threshold.
• In the EU, the Court of Justice ruled in 2024 that the Commission cannot accept Article 22 referrals from member states that lack jurisdiction under their own law, so attention has turned to national call-in powers.
• Several member states, including Italy, Denmark, Ireland and Sweden, have adopted or extended call-in mechanisms, and others have proposals.
• Deal teams should ask early whether a transaction could attract attention below thresholds, and allocate the risk in the agreement.

The shift away from thresholds

For many years the question of whether a transaction needed merger control clearance in Europe was a matter of arithmetic: do the parties’ turnovers exceed the thresholds in the relevant law? That is still the starting point. But authorities have become concerned that thresholds miss deals with competitive significance, notably acquisitions of young technology companies with little turnover, so-called killer acquisitions and deals that build market power incrementally. Their response has been to claim wider powers to review.

The United Kingdom

The UK regime is voluntary and non-suspensory, but the CMA can investigate any qualifying merger, and it can impose interim measures to prevent integration while it does so. A merger qualifies if either of two tests is met. The share of supply test is met where the parties together supply or acquire at least a quarter of goods or services of a particular description in the UK, with an increment from the merger. The turnover test applies where the target’s UK turnover exceeds a statutory amount.

The Digital Markets, Competition and Consumers Act 2024 changed the thresholds. It raised the target turnover threshold, added a safe harbor for transactions in which each party has UK turnover below a set figure, and introduced a new hybrid test for deals in which one party has at least a 33 percent share of supply and UK turnover above a set level, even if the other party has no UK overlap. This was intended to capture acquisitions by large players of smaller businesses in adjacent markets.

The CMA’s mergers intelligence function monitors deals that have not been notified, and the CMA invites parties to brief it voluntarily on transactions that might raise concerns. Parties should take its guidance seriously. A review that begins after closing can lead to an order to hold separate or even to unwind.

The European Union

The EU Merger Regulation applies to transactions with an EU dimension based on turnover thresholds. Article 22 allowed a member state to refer a transaction to the Commission even when the transaction did not meet national thresholds, and the Commission’s policy since 2021 had been to accept referrals from states that lacked jurisdiction themselves. In 2024, the Court of Justice held that the Commission has no power to accept such referrals, on the basis that the regulation does not extend to deals that the referring member state could not itself review.

The practical effect has been to move attention to national law. Some member states have a market share or transaction value test, and others have introduced call-in powers, which let the authority require a notification for a transaction below thresholds where there is a risk to competition. Authorities in Italy, Denmark, Ireland and Sweden are among those who have such powers, with differences in scope, time limits and procedure. The Commission has been reviewing its merger guidelines and has encouraged states to consider such mechanisms, and policymakers have debated whether to give the Commission itself a call-in power.

Deals can also be examined under the EU Foreign Subsidies Regulation and national foreign investment screening laws, which have their own thresholds and timetables.

What it means for deal planning

First, screen every transaction with a European footprint, even where turnover is low. Ask whether the target has a high share in a relevant market, whether it is a nascent competitor or holds significant data, intellectual property or capabilities, and whether either party has been the subject of regulatory interest.

Second, consider voluntary engagement. In the UK, pre-notification contact or a briefing paper can reduce the risk of an uninvited review. In the member states with call-in powers, informal contact can shape the authority’s approach, although it also draws attention to the deal and should be a considered decision.

Third, allocate the risk. Agreements should say who bears the risk of a post-signing call-in, whether a call-in is a condition, how long the parties will wait and what remedies each is willing to offer. Outside dates should allow for a possible review. In the UK, parties that close without notification risk an interim enforcement order, and the contract should anticipate it.

Fourth, think about timing. A call-in procedure may extend a timetable that otherwise looked simple, and early planning reduces the surprise.

Looking ahead

Expect more call-in powers, more intelligence gathering and more coordination between authorities. Companies that build the question into their standard process will manage the risk with less disruption.

Lucia Ferrante in Brussels and Priya Raghunathan in London lead Corvane Ryle’s coordinated European merger control work, and advise on UK and EU filings, pre-notification engagement and the allocation of regulatory risk in deal agreements. Read also our note on the new HSR form.