A draft revamp of EU merger rules proposes an 'innovation shield' for startups and R&D projects likely to boost competition, offering speedy approval. However, this shield will not apply if a large market player or a 'gatekeeper' under the Digital Markets Act is involved in the deal. The overhaul aims to balance fostering innovation with maintaining competition, particularly against US and Chinese rivals.
FILE PHOTO: A European Union flag flutters outside the European Commission headquarters in Brussels, Belgium Februrary 26, 2026. REUTERS/Yves Herman/File Photo BRUSSELS, April 22 - Startups claiming innovation benefits for their deals will likely secure speedy EU antitrust approval, but not if Big Tech is involved, a draft revamp of merger rules due to be announced in the coming weeks shows.
The overhaul, the first in more than two decades, came after telecoms operators led calls for looser merger rules to allow them to scale up to better compete with U.S. and Chinese rivals. European Union antitrust regulators have responded with a proposed 'innovation shield' whereby they will not intervene in deals involving startups or research and development projects likely to boost competition, the draft seen by Reuters shows.
The shield however does not cover deals where the acquirer is the largest player in the relevant market or where the company is labelled a gatekeeper under the Digital Markets Act which seeks to rein in the power of Big Tech. The European Commission document also details innovation, sustainability, resilience, investment and employment arguments which companies can raise, confirming a February Reuters report.
Commission officials and experts do not expect any radical changes in their assessment of merger deals as the rules have worked well and have proven themselves during court challenges. The changes will be open to feedback from companies and other participants before they are adopted.for breaking news alerts and key updates!
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