This in-depth interview with Nicolas Petit explores the European Commission's draft Merger Guidelines, focusing on dynamic competition, resilience, innovation, and the evolving analytical framework in merger review. Gain insights into how these changes could impact competition law and industrial policy. Find the Draft Merger Guidelines that we discussed throughout the episode here: https://competition-policy.ec.europa.eu/document/download/46dde10f-85c1-4590-a3f4-2b71f85685ef_en?filename=Merger%20Guidelines%20-%20final%20for%20public%20consultation.pdf. In the episode, we referenced paragraphs of the Guidelines (find the transcriptions below) and some other developments. Click on the links below to access them directly: - 00:17, The Horizontal 2004 Merger Guidelines: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52004XC0205(02). - 00:21, The Non-Horizontal 2008 Merger Guidelines: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52008XC1018(03). - 05:42, Footnote 18 of the Draft Guidelines defining resilience: "the readiness and ability of the internal market or part of it to continue servicing customers and to anticipate, withstand and recover from serious shocks". - 08:35, Paragraph 25 of the Draft Guidelines: "If the merging parties consider that the merger gives rise to efficiencies, as part of their prospective analysis, they must articulate and substantiate, in due time, a ‘theory of benefit’. A theory of benefit sets out how specific merger efficiencies occur and maintain or enhance effective competition, to the benefit of consumers (...)". - 13:56, Paragraph 64 of the Draft Guidelines: "Market shares – especially those based on the previous year – may not fully reflect a firm’s market power (...)". - 14:06, Paragraph 80 of the Draft Guidelines: "In some industries or markets, a static assessment of market power does not fully capture a firm’s competitive strengths and weaknesses from a dynamic perspective. (...) In these cases, the Commission also considers various other factors to assess the influence on the competitive process that a firm may have (‘dynamic competitive potential’)". - 14:13, The moligopoly hypothesis: https://academic.oup.com/book/33503/chapter/287809787. - 14:28, Paragraph 101 of the Draft Guidelines: "In its competitive assessment, the Commission considers all competitive constraints faced by the merged firm irrespective of whether they arise from inside or outside the relevant market. Products that do not exert a sufficient competitive constraint on the merging firms’ products to belong to the same relevant market (out-of-market constraints) may still play an important role in the assessment of market power". - 16:59, Farrell and Shapiro's work on unilateral effects: https://faculty.haas.berkeley.edu/shapiro/alternative.pdf. - 17:02, Ivaldi, Rey and Tilore on tacit collusion and non-coordinated effects (https://www.tse-fr.eu/sites/default/files/medias/doc/wp/2003/tacit_collusion.pdf) and Steve Davies (https://publications.aston.ac.uk/id/eprint/18471/2/Tacit_collusion_firm_asymmetries_and_numbers.pdf). - 17:34, Paragraph 192 of the Draft Guidelines: "In cases where a transaction involves a small innovative company, including a startup, or an R&D project with a dynamic competitive potential, the Commission in principle does not find a SIEC in relation to any theory of harm, including the loss of innovation competition, potential competition, entrenchment and foreclosure (...)". - 22:16, The EC's Dow/DuPont case (https://competition-cases.ec.europa.eu/cases/M.7932) and Illumina/Grail case (https://ec.europa.eu/commission/presscorner/detail/hu/ip_24_1964). - 23:45, Grail fails to develop cancer detection tests: https://www.statnews.com/2026/02/19/grail-cancer-test-galleri-results/. - 24:05, The Dynamic Competition Initiative: https://www.dynamiccompetition.com/.
