The European Commission is signaling an increased openness to approving large mergers and acquisitions that could enhance investment, innovation, and supply security, enabling European companies to better compete with rivals from the United States and China. Anthony Whelan, head of the Commission’s competition directorate, emphasized that companies will need to demonstrate the benefits of proposed combinations under the revised regulatory approach.

Whelan indicated that the Commission is adopting a more flexible stance toward “pro-competitive scale,” which could facilitate the emergence of stronger European firms, sometimes referred to as "European champions." He said this shift would help companies expand their capabilities to deliver improved products, services, and innovation while reinforcing supply chains amid geopolitical uncertainties.

This change reflects broader discussions within the European Union about bolstering the competitiveness of its industrial base. The move follows calls from figures such as former European Central Bank president Mario Draghi, who urged Europe to elevate its global economic standing. The Commission updated its merger guidelines earlier this year to reflect a greater willingness to consider mergers as strategic tools for enhancing innovation and competitiveness.

Since his appointment in April, Whelan has been steering the competition directorate through a period when longstanding EU principles prioritizing consumer welfare in merger reviews are being revisited. Historically, there has been skepticism about governments intervening to create dominant domestic firms; however, the Commission’s evolving approach may clear the way for deals previously viewed as too large to receive approval.

While Whelan did not specify how many potential deals may be under reconsideration, he acknowledged that the Commission is consciously signaling receptiveness to arguments emphasizing the broader benefits of consolidation. He underscored that this does not imply preferential treatment for European companies, affirming the regulator’s commitment to impartiality regardless of nationality.

The revised approach involves assessing how markets are likely to develop over a longer horizon and whether mergers would improve access to strategically important inputs constrained by geopolitical factors. The Commission will also consider whether combined entities could pool resources more effectively to meet the high capital demands of innovation or infrastructure investment.

Artificial intelligence is among the key sectors receiving close scrutiny, as policymakers express concern that the cost of developing advanced AI models and securing computing capacity may reinforce dominance by a limited number of US firms. Whelan acknowledged that the AI market exhibits some oligopolistic features and stressed the Commission’s intent to reduce barriers to entry and prevent market distortions in this rapidly evolving ecosystem.

Overall, the Commission appears poised to recalibrate its merger policy to better support the growth of competitive European businesses in a challenging global landscape.