- The economic study feeds directly into the first update to the EU merger framework in over 20 years, with revised guidelines expected by the end of 2026.
- The study develops a comprehensive conceptual framework to account for the dynamic effects of mergers, capturing both adverse and beneficial effects on future competition, under a forward-looking consumer welfare standard.
- The research draws on more than 450 publications spanning industrial economics, financial economics, macroeconomics and business, alongside evidence from dozens of merger cases considered by the European Commission and competition authorities.
The European Commission has today published an economic study on dynamic merger effects, prepared by Oxera in partnership with leading academics, as an important input into the revision of the EU Horizontal and Non-Horizontal Merger Guidelines, expected to be finalised by the end of 2026.The revised guidelines will mark the first substantive update to the EU’s merger control framework in over 20 years.
The study comes at an important moment for European competition policy. In the 2024 report, Mario Draghi, former President of the European Central Bank, called for competition policy to go beyond traditional price-based analysis and give greater consideration of dynamic competition effects.
Dr Helen Jenkins, Partner at Oxera, said: ‘Europe has set a clear ambition to strengthen its competitiveness and economic resilience. Effective competition policy is an important part of delivering that objective. By providing a stronger framework for understanding how mergers affect investment, innovation and future competition, this study can help ensure merger control supports competitive markets that deliver for consumers, businesses, and the wider European economy.’
Developed in close collaboration with three leading academic economists, the study provides competition authorities, merging parties, and their advisers with a conceptual framework for assessing how mergers may affect future product market competition, including through their impact on innovation, investment, and entry by both merging firms and their rivals. The framework is informed by an extensive review of the existing academic literature.
The framework provides a comprehensive definition of the potential dynamic effects of mergers, capturing both adverse and beneficial dynamic merger effects. These include both potential harms to future product market competition through lower investment incentives and higher prices for future products, and the genuine benefits that mergers can generate through dynamic synergies and enhanced innovation capabilities.
Built around an Expected Consumer Welfare standard, it provides a consistent basis for assessing uncertain, forward-looking outcomes from a merger. It also provides a coherent framework for assessing claims that a merger will increase investment and deliver benefits to consumers while balancing them against potential harms. It proposes a ‘sliding-scale’ approach to weigh dynamic harm and benefits: where the expected harm from a merger is more significant or immediate, the expected consumer benefits arising from the merger need to be correspondingly stronger.
The study finds that accounting for dynamic effects may amplify or offset more traditional static merger effects, creating potentially significant trade-offs. This often raises the stakes from merger control decisions.
Dr Giulio Federico, Partner at Oxera and one of the study’s lead authors, said: ‘Merger rules written for a static world are no longer fit for purpose. In the modern economy, firms don’t just compete on current products and prices; they compete on a broad range of dimensions of future product market competition, including investment, innovation and entry. The existing guidelines reflect a more static approach to competition. This study provides the European Commission, national competition authorities, and practitioners the coherent analytical foundations needed to bring merger control into step with how modern markets work.’
The full study is available on the European Commission’s website here.
Notes to editors
About the study
The economic study on the dynamic effects of mergers was prepared by Oxera on behalf of the European Commission. It feeds directly into the revision of the EU Horizontal and Non-Horizontal Merger Guidelines, which are expected to be finalised by the end of 2026.
The research draws on a comprehensive review of more than 450 publications spanning industrial economics, financial economics, macroeconomics and business, alongside evidence from dozens of past merger cases considered by the European Commission and other competition authorities. The conceptual economic framework was developed with input from academic advisors and peer reviewers throughout the process.
The study provides strong analytical foundations for assessing the dynamic effects of mergers, including their potential impact on innovation, investment, entry, future product market competition and consumer outcomes.
The study includes two parts: the main report, in Volume 1; and a detailed review of the literature, in Volume 2.
Oxera experts
The Oxera team includes Dr Giulio Federico, Partner; Dr Timo Klein, Managing Consultant; Dr Francesca Sala, Partner; and Dr Helen Jenkins, Partner.
Academic collaborators
The study was developed in collaboration with Professor Otto Toivanen, Aalto University School of Business; Professor Yassine Lefouili, Toulouse School of Economics; and Professor Leonardo Madio, University of Padua.
European Commission review of the Merger Guidelines
The European Commission is currently reviewing its Horizontal and Non-Horizontal Merger Guidelines. The revised Guidelines are expected to be finalised by the end of 2026.
The review takes place in the context of a wider debate about the role of innovation, investment and dynamic competition in merger control, and Europe’s broader focus on strengthening its competitiveness.
Read the study here.