Europe does not have an ideas problem. Fundamental research, entrepreneurial skills and innovative start-ups are all in place, and the break comes later. The most promising firms, once established, are intercepted by incumbents and bought by the highest bidder, and with the loss of autonomy the incentive, propensity and speed to invent and patent slow down as well. The regulatory answer to so-called killer acquisitions came fast, with EU and national interventions on below-threshold transactions, yet results have fallen short of expectations. Hence Assonime’s choice to focus on soft law, since the merger assessment guidelines, now under review after the consultation just closed, remain the fastest lever to support European consolidation in innovation markets.

Why the current guidelines no longer fit

The limit lies in their design rather than in their detail. The guidelines in force were conceived for mature markets with stable innovation dynamics and rest on a static approach built on price and market share to establish a significant impediment to effective competition, the so-called SIEC test. Such a framework struggles to capture the new dimensions of competition, the pace of the digital economy and the overall effects of concentration among European companies. The Draghi report, the priorities of Vice-President Ribera’s mandate (strategic autonomy, simplification, lower...