A suggested modernised framework can be a facilitator for growth and broader consumer benefits across many European sectors
Brussels, 5 February 2026: Europe’s merger guidelines need to move beyond their narrow focus on short-term static effects and embrace longer-term considerations, such as innovation, investment and capability building, according to a new report.
A Dynamic Framework for the Assessment of Horizontal Mergers, prepared by BRG and commissioned by the GSMA with support from Connect Europe, proposes a conceptual framework to support the European Commission’s review of its Horizontal and Non-Horizontal Merger Guidelines.
It comes as the European Commission recognised in last year’s Competitiveness Compass that the existing policy framework needs to evolve to reflect modern dynamics and to allow companies to scale up in global markets, while maintaining a level playing field in the Single Market. The 2024 Draghi report also recommended that innovation, resilience and investment intensity should be given greater weight in merger policy.
Incorporating dynamic effects
The report identifies several underlying flaws in the current Horizontal Merger Guidelines.
These include: a highly risk-averse approach that discounts longer-term dynamic effects; the core assumption that mergers are more likely to harm competition than enhance it; the asymmetric treatment of pro- and anti-competitive effects; and the drawback in the current sequencing of analysis, in which efficiencies are treated as offsets to an already-formed theory of harm.
To address these concerns, the proposed framework in the report introduces a symmetric approach for evaluating adverse and positive effects together in the core competitive assessment.
Ultimately, a three-step approach is proposed – the identification of relevant dimensions of competition which drive consumer welfare in a given industry; the development of a theory of competitive effects (and not only harm) for each competitive dimension; and the integration of efficiencies into the core competitive assessment.
The proposed framework consists of the following key recommendations for how to update the Commission’s approach to assessing horizontal mergers:
- Consider all effects from the start: Mergers should be assessed by looking at both potential benefits and potential harms together, rather than treating them separately or at different stages of the process.
- Balance benefits and risks consistently: Positive and negative effects should be measured using the same clear standard of “more likely than not,” avoiding an unrealistically high standard for recognizing benefits.
- Take a broader view of consumer welfare: Assessments should consider overall consumer welfare, including not just prices but also quality, choice, and innovation. They should also reflect the wider impact on society, rather than focusing narrowly on particular groups of consumers.
- Be clear about the counterfactual / baseline scenario: The assessment should explicitly describe what the market would look like without the merger and use that consistently when evaluating both potential harms and benefits.
- Use market indicators wisely: Measures like market share are useful as a first check, but they should not automatically determine the outcome of a case.
- Focus on holistic evidence: Decisions should rely on detailed, mechanism-based evidence that shows how mergers will affect prices, quality, investment, and innovation – no single metric should be used as a shortcut.
- Avoid automatic presumptions: Indicators should guide the analysis, but should never be treated as proof of a merger’s effects on their own.
- Scale the analysis to the case: The framework should be flexible, increasing in depth and complexity only when needed to decide whether a full competitive review is necessary.
This approach would ensure merger control is forward-looking, balanced, evidence-based, and focused on what truly matters for consumers, including price, quality, innovation, and long-term investment, while avoiding one-size-fits-all assumptions.
The report includes case study examples of how this new framework would be applied across a number of sectors, including retail, life sciences and telecoms.
Vivek Badrinath, Director General at the GSMA, comments: “Optimising consumer welfare is the most important goal of merger analysis.
“The current approach to merger assessments does not give proper weight to dynamic elements which can result in merger assessment outcomes that have a longer-term detrimental impact on innovation, growth, investment and ultimately consumer welfare.
“As the Commission advances its review of the Merger Guidelines, it is imperative that a modernised and broader-based consumer welfare approach to empower Europe’s industries and which allows them to scale up in global markets is embedded in the core merger assessment analysis.”
Alessandro Gropelli, Director General of Connect Europe, comments: “Europe cannot afford to stand still. In an era of intense economic and geopolitical competition, fragmentation has become a strategic liability. Lack of scale is holding back investment, innovation and technological sovereignty across industries. In connectivity, the warning signs are clear: despite having more operators.
“Europe invests less and is falling behind its global peers on advanced 5G. Merger policy must urgently evolve, adopting a more dynamic, forward-looking approach that enables scale, unlocks long-term investment and strengthens Europe’s resilience, while continuing to deliver for consumers.”
To read the full report, see here.
ENDS
About the GSMA
The GSMA is a global organisation unifying the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change. Our vision is to unlock the full power of connectivity so that people, industry, and society thrive. Representing mobile operators and organisations across the mobile ecosystem and adjacent industries, the GSMA delivers for its members across three broad pillars: Connectivity for Good, Industry Services and Solutions, and Outreach. This activity includes advancing policy, tackling today’s biggest societal challenges, underpinning the technology and interoperability that make mobile work, and providing the world’s largest platform to convene the mobile ecosystem at the MWC and M360 series of events.
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About Connect Europe
Connect Europe is the voice of the leading providers of connectivity networks and services in Europe. Our members are at the forefront of innovation in the telecom and technology ecosystems, connecting over 270 million Europeans with cutting-edge mobile and fixed networks, such as fibre and 5G. They also deliver advanced services, ranging from first-class IT, AI and cybersecurity solutions to entertainment and content. As the main investors in the industry, our members drive the digital transformation of the Continent, accounting for more than 70% of total telecom sector investment in Europe. Formerly known as ETNO, we stand for an improved policy and regulatory environment that enables citizens and businesses to benefit from digital connectivity and services. www.connecteurope.org
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