Q&A: Navigating dynamic competition in merger control

August 2025  |  SPECIAL REPORT: COMPETITION & ANTITRUST

Financier Worldwide Magazine

August 2025 Issue

FW discusses dynamic competition in merger control with David Cardwell at Baker Botts, Logan Breed at Hogan Lovells and Ian Giles at Norton Rose Fulbright LLP.

FW: How would you describe the current challenges dealmakers face regarding merger control and regulatory compliance? How are government policies evolving in this area?

Cardwell: One challenge facing dealmakers is simply one of proliferation of regulatory enforcement connected with merger activity. Whereas a decade ago there were substantially fewer jurisdictions actively enforcing merger control regimes, the number of countries doing so has grown substantially. On substance, a decade ago many competition authorities applied fairly ‘conventional’ substantive assessment standards – including market power and unilateral effects analysis – in determining whether any given merger gave rise to competition concerns. Governments have worked to shift these standards, with the applicable rules morphing over recent years into a more complex set of principles governing the conduct of substantive merger reviews, changing in particular as regards digital markets, innovation and related topics. This makes the regulatory landscape both less familiar and less predictable, and it is very much a moving target, with governments seeking to ramp up changes in this area.

Giles: The geopolitical climate, including issues related to tariffs, national champions and economic growth and investment, as well as potential concerns related to new technologies, are driving considerable debate and evolving approaches regarding merger control. The UK government has sent a clear message that the Competition and Markets Authority (CMA) must do more to support its economic growth mission, emphasised by unexpectedly replacing the CMA’s chair in January 2025. Various changes are being introduced to improve the CMA’s regime, embedded around its new ‘4Ps’ framework: pace, predictability, proportionality and process. Proposed reforms include changes to clarify the CMA’s jurisdiction, speed up reviews and reduce the burden for parties. This follows criticism that the CMA has been too interventionist and burdensome in certain cases over recent years, including arguably sometimes ‘stretching’ its jurisdiction to review global deals with limited UK impact. The changes should be positive for dealmakers, although deals raising UK concerns will still face rigorous enforcement.

Breed: In the US, the biggest challenge dealmakers are facing is uncertainty with respect to how the Republican-led agencies are approaching merger control. The Federal Trade Commission (FTC) and the Department of Justice have pledged to retain the ‘2023 Merger Guidelines’ as well as the more onerous merger notification requirements in the updated Hart-Scott-Rodino Act (HSR) rule published last year. The agencies’ leaders have adopted a populist understanding of antitrust enforcement that considers ‘big monopoly’ to be as much as a threat as the more traditional conservative concern of ‘big government’. On the other hand, in a signal that Republican enforcers may be looking to be more practical and business-minded than their Democratic predecessors, Andrew Ferguson, chair of the FTC, has said that he does not want enforcers to be a “roadblock” for M&A transactions that do not present competition issues.

FW: What types of deals are likely to face increased scrutiny? How are factors like foreign direct investment, national security, antitrust concerns and ‘killer acquisitions’ influencing merger control?

Giles: Foreign direct investment (FDI) and national security regimes have expanded globally over recent years, following further consideration of what constitutes a national security threat – which can now include threats posed by new technologies like artificial intelligence (AI) and advanced robotics. Deals now regularly trigger FDI and national security reviews, but these are much less onerous than competition-based reviews. Killer acquisitions remain an area of keen interest. Several European Union (EU) member states have amended their regimes to be able to call-in ‘below threshold’ deals, increasing uncertainty about whether or where reviews are needed. The NVIDIA/Run:ai appeal is testing whether such powers can be used as the basis for an article 22 referral to the European Commission (EC). Killer acquisition concerns have also increased interest in parties’ internal documents, which has since expanded to all types of deals.

Breed: Antitrust regulators in the US, UK and Europe have indicated that Big Tech deals will continue to be heavily scrutinised. Other industries that may also face heightened scrutiny are healthcare and agriculture. With respect to factors such as international trade, FDI and national security, globally there is less trust across the board with respect to dealings with the US government, which may make it more difficult to bring transactions involving interested parties across the finish line. National security and FDI reviews may become more difficult around the globe as companies dealing with increasing global geopolitical tensions try to retrench cross-border acquisitions and protect domestic businesses. In addition, how other jurisdictions react to the administration’s ‘America First’ trade policies might lead to the Trump administration advocating for more in-depth investigations of these countries’ US-based acquisitions.

Cardwell: The introduction and enforcement of FDI controls has had a considerable impact on dealmakers. There are frequently situations where transactions which may not trigger merger control notifications nevertheless trigger a number of FDI notifications. The vast majority of global deal activity does not actually touch on matters of national security, but the new landscape has serious implications in terms of resources and time needed to close cross-border deals. The EU’s Foreign Subsidies Regulation is another example of authorities becoming more ‘protectionist’ in their assessment of the potentially distortive effects of global deals on national and regional economies. While the EU has faced setbacks recently in its erstwhile attempts to fashion a more invasive approach to stepping in to assess below-threshold mergers, the past few months have demonstrated that the EC and national competition authorities are minded to continue to seek out ways to catch so-called killer acquisitions.

FW: What recent developments could impact dealmakers’ merger control and compliance obligations? What steps should they take to address these considerations during the deal process?

Cardwell: One key development has been the uptick in gun jumping-type enforcement actions over the past few years. Authorities which previously had not shown much interest in opening gun jumping investigations, appear to have grown in confidence in that regard. Not only the EU and individual EU member states, but also, for example, the General Authority for Competition in Saudi Arabia have taken action to investigate perceived failures to notify – or the related ‘sin’ of perceived failures to provide correct information as part of merger review processes. This increase in enforcement activity should serve as a pretty sharp reminder to dealmakers that they must work diligently to understand in which jurisdictions their deals may require regulatory engagement, including in jurisdictions with whom those dealmakers have not previously dealt. Hasty decisions to rule out merger notifications or failure to engage fully in some jurisdictions can lead to a great deal of deferred pain.

Breed: In the US, the new HSR rule, which became effective in February 2025, impacts what categories of information parties are required to disclose and when they need to file. These new requirements significantly increase the burden on filing parties for the majority of transactions. Parties should anticipate a longer lead time for HSR filings, and prepare for the increased likelihood that a filing will include something that catches the agency’s attention and results in further inquiry. In the UK, the Digital Markets, Competition and Consumers Act 2024 introduced a mandatory notification requirement for companies designated as having ‘strategic market status’, which could apply to a broad range of companies that engage in ‘digital activities’ in the UK. The EC is currently undergoing a comprehensive review of its merger guidelines, which includes an economic study on the dynamic effects of mergers linked to firms’ forward-looking behaviours, specifically their ability and incentive to invest and innovate, as well as to enter or exit a market in the mid-to-long term.

Giles: An interesting recent development is the EC’s decision to fine Delivery Hero and Glovo €329m for a four-year cartel in the online food delivery sector, with the relevant conduct – exchanging sensitive information, allocating geographic markets and agreeing not to poach each other’s employees – facilitated by Delivery Hero’s non-controlling minority stake in Glovo. This is the first time the EC has found a non-controlling interest has been used in this way and investors should take note. Greater focus on parties’ internal documents means businesses need to ensure their employees know to avoid inappropriate language that may incorrectly suggest that a transaction raises competition concerns. This extends to materials produced even when a deal may not be in contemplation. Dealmakers should also factor in the greater complexity around merger control, including uncertainty regarding potential below-threshold reviews, when considering deal timelines, long-stop dates and break fees.

FW: Could you highlight any high-profile cases that show how mergers can affect dynamic competition? Are authorities shifting their focus beyond traditional assessments of market power?

Breed: One recent example was Microsoft’s acquisition of Activision. The FTC challenged the deal based on the agency’s concern that Microsoft’s potential exclusive access to Activision’s content in the streaming market could lead to “higher prices, lower quality, less product variety, and reduced innovation”. Ultimately, US courts found that the FTC failed to make a sufficient showing that Activision Blizzard content would be available to the cloud-streaming and subscription markets in the absence of the merger. The court found insufficient the FTC’s arguments that Activision Blizzard had not concluded that it would “never” allow its games onto a subscription or streaming service. In the UK, the CMA approved the acquisition after Microsoft agreed to sell its cloud streaming rights for Activision games in order to address the agency’s concerns about Microsoft’s dominance in the emerging cloud gaming market. The EC also approved the acquisition subject to remedies: specifically, a commitment by Microsoft to enter into a 10-year licensing agreement to allow cloud streaming platforms in the EU to access Activision titles.

Giles: Dynamic competition is an increasing feature of cases, especially mergers involving technology players or parties active in other innovative sectors like pharma and life sciences. This is not an entirely new phenomenon – a key reason for the CMA updating its substantive merger guidance in 2021 was that it was already seeing more mergers in dynamic markets so needed to add content on potential competition and innovation. Dynamic competition has been key in several cases. Microsoft/Activision and Meta/Giphy are high-profile transactions where concerns about dynamic competition and loss of innovation, as well as choice, were to the fore. The EC cleared Microsoft/Activision with remedies, as did the CMA at the second attempt, but the CMA prohibited Meta/Giphy.

Cardwell: Over the past few years there has been much discussion of a shift of focus beyond ‘traditional’ market power assessments, toward a greater emphasis on the way in which mergers may affect dynamic competition. The Draghi Report, published in 2024, called specifically for the EC to update its substantive merger guidelines in order to explain how mergers would be assessed in terms of their ability to affect incentives to innovate. The EC recently launched a consultation on its existing horizontal and non-horizontal merger guidelines and we can expect the new guidelines, expected in 2026, to reflect a policy shift of sorts. Recent cases such as Adobe/Figma in 2023 have featured extensive consideration by the EC of dynamic competitive elements, building on previous cases that focused strongly on innovation competition, such as Dow/DuPont in 2017 and Bayer/Monsanto in 2018.

FW: How might emerging technologies and market changes influence the dynamic competition and merger control policies of global competition authorities?

Giles: AI partnerships and so-called ‘acqui-hires’ are an increasing area of interest for competition authorities. A key question is whether the nature of such arrangements is sufficient to qualify as a ‘merger’ to trigger a merger control review, and this can vary from case to case and by jurisdiction. The potentially transformative effects of AI apply to potentially every area of the economy. This means that AI may increasingly have an impact on competitive assessments in general, to the extent that AI continues to develop and has a material impact on how companies compete in relevant sectors. Dealmakers need to keep in mind that evolving developments may mean that how their deals were assessed a few years ago – or possibly even last year – may not be the way their deals are assessed now or in the future. New technologies like AI are relevant in this regard, but also broader geopolitical developments. For example, the competitive constraint from foreign goods may be much reduced if tariffs or shortages significantly increase the price of such goods, while political desire to build defence capabilities may impact merger control outcomes in defence sectors.

Cardwell: The Draghi Report, issued in 2024, focused heavily on a shift in the European economy toward more “innovation-heavy sectors”, featuring competition based on digital technologies and brands, with a related emphasis on the critical role of innovation. It is these sorts of fundamental movements in the nature of the economy that tend to drive competition authorities to at least examine – if not change – their existing substantive merger control policies. The EC has moved explicitly to overhaul its horizontal and non-horizontal merger guidelines, and effective changes in substantive policy are widely anticipated as a result. Other authorities, including, for example, the Competition and Markets Authority in the UK and the Australian Competition and Consumer Commission, have made clear that they will pay greater attention to the assessment of dynamic competition factors in reviewing not just deals that take place in markets involving emerging technologies, but also in markets which are more established but which increasingly feature dynamic competitive elements that did not previously play as great a role.

Breed: Emerging technologies and market changes are often significant elements of an antitrust review. The EC’s proposed revisions to merger control review suggest that the EC will be allowed to formally take into account a merger’s demonstrable benefits on innovation and EU resilience in strategic fields, such as AI, cleantech, critical raw materials, energy storage, quantum computing, semiconductors, life sciences and neurotechnology. Practitioners are closely watching the effect that AI has on merger review globally. For example, regulators may consider competitors’ access to AI tools to lower the barrier to entry in certain markets, such as in markets heavily reliant on software coding – a field in which AI is already starting to supplant human labour and lead to increased efficiency. AI may also make it easier for pharma companies to develop new drugs, which would potentially upend antitrust enforcers’ traditional analysis of the pharma pipeline.

FW: What advice would you give dealmakers on engaging effectively with global merger control regimes, ensuring a smoother review process and obtaining clearance with the least disruption?

Breed: Dealmakers should think holistically about antitrust and FDI considerations, specifically with respect to how a potential divestiture or other remedy may play out in multiple jurisdictions at once. An understanding of global competition enforcement trends and the evolving parameters of FDI regimes is essential to ensuring compliance. Parties should have an understanding of which jurisdictions are governed by regulators with particular sensitivities to deals in certain sectors. For example, there may be heightened regulatory scrutiny in certain sectors such as AI, semiconductors, health and defence. Parties should work with counsel in advance to respond to the likelihood of increased inquiries from enforcers for transactions in these industries.

Cardwell: While there have been a huge number of developments in merger control and regulatory rules and practices globally, it should not come as a surprise to any dealmaker that even the smallest of transactions can lead to notification requirements – or leave the principals vulnerable to ex post facto investigation. A considerable increase in FDI controls, foreign subsidy notification requirements and national security reviews means that cross-border deals face a full suite of potential regulatory challenges. The earliest possible engagement in internal strategising to identify potential filings and, critically, to shape the deal timeline in a way that enables timely engagement with counterparties and regulatory authorities in order to allow a ‘clean’ closing, are critical. One final piece of advice is to encourage and allow information sharing between the different authorities reviewing the deal. Facilitating interagency cooperation almost always leads to fewer questions and faster results, not the opposite.

Giles: Dealmakers should consider merger control as early as possible in deal planning. This is not only because serious substantive concerns can be a dealbreaker, but also because it is increasingly complex to determine where reviews will be needed, given the greater number of jurisdictions and different types of regimes and thresholds these days. Similarly, parties should think about possible remedies at an early stage if there are potentially serious substantive concerns, including whether a global remedy may be needed or local remedies in only certain jurisdictions. Parties with UK activities should contemplate whether their deal is suitable for the CMA’s ‘briefing paper’ process – a short, informal submission that can provide comfort the CMA is unlikely to call a deal in for review if a full voluntary notification is not submitted.

FW: With major jurisdictions adopting new review processes and increasing enforcement activities, how do you expect the merger control landscape to evolve in the coming months?

Cardwell: The recent proliferation of merger control enforcement in the Middle East is going to continue to gather pace. In some jurisdictions, Saudi Arabia for example, a revamped merger control regime has been enforced by the competition authority for a few years, and we are now starting to see the increasing sophistication of the authority as it gains experience on the substantive side and calibrates its review standards accordingly. In another example, the United Arab Emirates has recently adopted a new merger control enforcement regime, and we can expect to see it feature more and more in the review of major cross-border deals. Relatedly, in the coming months we will see a shift toward greater efforts at sharing of information in global merger reviews between established competition authorities and ‘newer’ authorities in the US, EU, UK, Australia, China and Saudi Arabia.

Giles: The merger control landscape will remain complex over the coming months, with legislative changes and revised approaches and guidance taking time to work through. On 20 June 2025, the CMA began consulting on proposed changes to its jurisdictional guidance and template merger notice, including to clarify how it applies its flexible and uncertain ‘share of supply’ and ‘material influence’ tests and changes to speed up reviews. Legislative reforms are expected to follow to tighten the CMA’s jurisdiction and further increase predictability – but these will take longer. The CMA has been reviewing its approach to merger remedies and will consult on specific proposals this autumn. The CMA has a reputation for being relatively inflexible, strongly favouring straightforward divestments, especially at phase one. However, recent signs suggest the CMA is becoming more receptive to ‘behavioural’ or ‘mix and match’ remedies – notably in the Vodafone/CK Hutchison (Three) and Schlumberger/ChampionX cases – so it will be interesting to see whether this is reflected in its proposals.

Breed: The CMA has said it is pulling back from some of the aggressive positions it has taken with respect to merger review. In March 2025, it published two documents that indicate an evolving approach to UK merger control, with the stated aim of moving toward greater efficiency and flexibility of process. In the EU, the EC has announced a revision to its merger control rules and suggested that changes will lead to greater “flexibility” when reviewing concentrations in the EU. In the US, increased requirements for merger notification under the new HSR rule will add time to the parties’ filing process. However, Mr Ferguson does not want the FTC to be a “roadblock” to mergers that do not raise competition concerns, and says the agency will work to expedite review of such transactions. The reinstatement of early termination for HSR filings found not to raise competitive concerns is a step toward achieving this goal.

David Cardwell is the partner in charge of Baker Botts’ Brussels office and a member of the antitrust and competition practice. His practice focuses on UK and EU competition law, including a particular concentration on EU and international merger control laws, and UK competition law (both mergers and behavioural). Mr Cardwell has represented clients in significant mergers and acquisitions across many industry areas, including the technology, pharmaceutical, media, automotive and heavy industry sectors. He can be contacted on +32 (2) 891 7330 or by email: david.cardwell@bakerbotts.com.

Logan Breed is the global co-head of the Hogan Lovells antitrust, competition and economic regulation practice. He has handled many of the most cutting-edge antitrust reviews of M&A of the past 20 years, as well as numerous non-merger conduct investigations and antitrust litigation matters. He has particular experience with issues at the intersection of antitrust and intellectual property law. His broad industry experience includes computer software and hardware, e-commerce, telecommunications, media and entertainment, consumer products and defence. He can be contacted on +1 (202) 637 6407 or by email: logan.breed@hoganlovells.com.

Ian Giles is an antitrust, competition and regulatory lawyer working from Norton Rose Fulbright LLP’s London and Brussels offices. He has been involved in a number of significant cases in recent years across the spectrum of competition law, including securing approvals for major transactions, representing clients in high-profile market and competition investigations, and advising on disputes in respect of competition, regulatory and trade law. He can be contacted on +44 (0)20 7444 3930 or by email: ian.giles@nortonrosefulbright.com.

© Financier Worldwide

THE PANELLISTS

David Cardwell

Baker Botts

Logan Breed

Hogan Lovells

Ian Giles

Norton Rose Fulbright LLP

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