EU antitrust regulators on Friday ditched a merger tool aimed at killer acquisitions two months after Europe’s top court vetoed this expanded merger power which had been widely criticised by companies as regulatory over-reach.
The Luxembourg-based Court of Justice in September sided with Illumina in its fight against the European Commission’s decision to wield a power called Article 22 to assess its $7.1 billion Grail bid even though it was below the EU’s merger revenue threshold.
“In view of this judgment and in line with the principle of good administration, the Commission has decided to withdraw its Guidance,” the EU executive said in a statement.
The Guidance issued in March 2021 allowed the EU antitrust watchdog to encourage or accept requests from national competition agencies to examine mergers even when these deals fall outside their competence.
The EU competition enforcer had in recent years used this power against so-called killer acquisitions in which big companies buy startups to shut them down, especially in the technology and pharmaceutical sectors.
The Commission said it may look to other methods to catch killer acquisitions.
“The withdrawal of the Guidance is without prejudice to any future initiative by the Commission in relation to transactions involving small and medium-sized enterprises or small midcaps that fall below relevant jurisdictional thresholds,” it said.