Agreeing conditions precedent and deal timelines has always been a challenge for companies. From an EU perspective, companies previously only had to consider whether a deal led to an EU or Member State merger control filing obligation. However, there are now three new layers of complexity for companies to consider in the EU:

1. Article 22 and ex-post assessments: a new approach to the EU’s merger control referral mechanism together with the ex-post review of transactions has added complexity to consider when entering into a new deal.
2. Foreign Direct Investment (FDI): 23 EU Member States now have a an FDI regime which if the filing thresholds are met gives rise to a notification requirement and clearance prior to closing. Sweden is the most recent EU Member State to adopt an FDI regime, which came into force on 1 December 2023.
3. Foreign Subsidies Regulation: as of 12 July 2023, transactions in the EU may also be subject to a further pre-closing review of broadly defined financial contributions from non-EU Member States.

From 1 September 2023, new procedural merger control rules apply in the European Union. New notification forms will need to be used. More merging parties will be able to avail themselves of the Simplified Procedure.

On 13 July 2023, in Case C-106/22, the European Court of Justice delivered its decision in relation to a preliminary reference submitted by the Budapest High Court. In the context of companies that often have a cross-border ownership structure extending outside of the EU, the ECJ concluded that the fact that a parent company registered in a third country has a majority control over an EU-based investor does not mean that the EU FDI Screening Regulation applies.

On 13 July 2022, the European General Court endorsed the European Commission’s ability to exert jurisdiction over transactions that do not trigger either EU or national merger control thresholds by virtue of the so-called Article 22 referral mechanism (Case T-227/21). With this ruling, the General Court has effectively validated a hybrid ex ante/ex post EU merger control regime. It is hoped that any future Article 22 intervention will remain exceptional.

After being postponed twice, the European Commission (Commission) published its draft Digital Markets Act (DMA) on 15th December 2020, in revised form — the EU’s Regulatory Scrutiny Board having objected to earlier iterations. The DMA takes the form of a regulation as the Commission seeks to ensure maximum alignment among Member States. The proposed “Digital Services Act” (DSA ) was published on the same day.