Small fish, tight net

Across Europe competition authorities are increasingly targeting M&A transactions that fall below traditional turnover thresholds. The European Commission (EC) and several National Competition Authorities (NCAs) are expanding their toolkits through call-in powers, post-closing antitrust enforcement and expansive interpretations of existing frameworks to close the gap around below-threshold deals in fear of missing out on so-called killer or roll-up acquisitions. While killer acquisitions mean large established market players buying nascent competitors to eliminate future competition, roll-up acquisitions refer to a company systematically taking over small competitors to achieve consolidation of a fragmented market.

NCAs fish in the shallow for big moves – a wave of national call-in rights

Germany’s transaction value threshold (TVT) currently serves as Germany’s local mechanism for capturing deals that fall below traditional turnover threshold. The TVT was introduced in 2017 after the acquisition of WhatsApp by Facebook, which, at the time and to the disappointment of the FCO, was not subject to merger control review in Germany due to WhatsApp’s low domestic turnover. In the aftermath, German thresholds were amended to catch high value acquisitions of targets with minimal or no local revenue but “substantial operations in Germany”, as demonstrated, for instance, by a high growth potential with non-paying users in the foreseeable future.  

With the Meta/Kustomer ruling of the Federal Court of Justice (FCJ) of June 2025 the “substantial operations in Germany” test has been significantly broadened. In essence, the FCJ – rather surprisingly – adopted an “effects-based” approach to the “domestic activities” test, which effectively extended the FCO‘s jurisdiction to any high-value acquisition of a target with only tangential links to Germany. The FCJ confirmed that Kustomer’s contract data-processing activities in relation to German end-users (not direct customers) can establish substantial domestic operations if the processed end-user profiles are of competitive relevance to Facebook’s messaging services – albeit Kustomer’s German business customers (reportedly below 10) accounting for less than 1% of its overall customer base and Kustomer generated less than 1% of its global turnover in Germany. In an era shaped by data-driven business models, this confronts companies with the challenging task to assess whether and to what extent a target company processes German user data or to what extent German users rely on its technology. The FCO has gone even further and recently indicated that the precedential scope of the decision should not be limited to data-processing activities but could be expanded to basically any link to Germany as long as the target company’s Germany related activities are somehow business-related.

While the president of the Federal Cartel Office (FCO) Andreas Mundt has historically defended the TVT, he more recently voiced dissatisfaction with the legal uncertainty surrounding the ““substantial operations in Germany” test. In several public speeches, he showed a surprising openness to replacing the TVT with a call-in power in Germany. Until this legislative initiative is picked up by Parliament, the FCO and businesses alike must grapple with the TVT in its current form – particularly the unresolved question of which types and scope of activities in Germany are sufficient to trigger the TVT.

While the debate on introducing call-in powers has only just begun in Germany and for example also Finland, other EU Member States are well ahead:

• The amendment of the Danish Competition Act in mid-2024 equipped the Danish Competition and Consumer Authority (DCCA) with a call-in power which is triggered if, additionally to a combined aggregate turnover in Denmark of at least DKK 50 million (which is well below the normal threshold), “there is a risk that the merger will significantly impede effective competition, in particular due to the creation or strengthening of a dominant position”.

• In July 2024, the Czech Office of Protection of Competition (OPC) proposed a call-in power for mergers that do not meet the normal turnover thresholds (instead a new threshold of combined turnover of CZK 1.5 billion and turnover of two undertakings of at least CZK 100 million in the Czech Republic is foreseen) if the transaction “may distort competition”. The proposal did not reach parliamentary approval before the 2025 elections but is likely to be revisited by the new parliament in 2026.  

• In January 2025, the French Competition Authority (FCA) launched a public consultation outlining three alternatives: (1) a targeted call-in power based on quantitative and qualitative criteria, (2) notification obligations for economic actors with a considerable degree of market power, e.g. those designated as gatekeepers by the EC, and (3) relying on the so-called “Towercast doctrine”, i.e. ex-post enforcement by invoking abuse of dominance rules (see below). Current indications show that the FCA favours an ex-ante mechanism (option 1 or 2) to complement its already existing practise of ex-post enforcement.

• Similarly, in the Netherlands, following the call by the chairman of the Dutch Authority for Consumers and Markets for a call-in right, a draft act providing for such a call-in power was published for public consultation in March 2025.

• Belgium informally announced its intention to equip the Belgian Competition Authority (BCA) with a call-in power in April 2025. In the meantime, Belgium has become a pioneer in testing the Towercast doctrine as it launched respective investigations only a week after the ECJ’s Towercast ruling (more below).

Towercast: the post-closing catch

In parallel to creating national call-in powers, NCAs increasingly scrutinize mergers post-closing by invoking abuse of dominance provisions – a trend that was considerably bolstered by the ECJ’s “Towercast” judgment.

In a nutshell, the Towercast decision concerned a French merger case on the market for television transmission towers in which a smaller competitor (Itas) was acquired by the incumbent (TDF). Competitor Towercast filed a complaint alleging that the merger constituted a “killer acquisition” targeted at eliminating a rival competitor. While the FCA initially rejected the complaint, the ECJ later held that below-threshold transactions are not shielded from ex-post antitrust scrutiny under Art. 102 TFEU. This practice - now known as the “Towercast doctrine” - has been applied to a number of national, non-notifiable mergers:

• FCA - Doctolib/Mon Docteur (2025): The FCA sanctioned a closed merger based on the finding of an anticompetitive objective and effect under Art. 102 TFEU and the French Commercial Code. The fine of €50,000 was rather symbolic reflecting the high degree of legal uncertainty prior to the Towercast Judgment and closing of the transaction. Yet, in the same decision, the authority levied a heftier penalty of around €4.6 million for unlawful exclusivity and tying practices.

• BCA – Proximus/EDPnet and Dossche Mills/Ceres: The BCA’s post-closing investigation of the Proximus/EDPnet non-notifiable telecom merger was eventually resolved by Proximus divesting the assets of the newly acquired EDPnet to its competitor Citymesh. When Belgium’s two largest flour producers, Dossche Mills and Ceres, signed an agreement to merge, the BCA again invoked Art. 101 AEUV and launched an investigation on anticompetitive agreements. Though both cases investigated by the BCA ended with the parties abandoning the deal and hence without sanctions, they signalled the BCA’s readiness to apply the “Towercast doctrine”.

Brussel’s unwavering efforts to cast its net wider

The roots of the debate on how to review below-threshold deals traces back to the 2021 Illumina/Grail saga – the clearest example of the EC’s willingness to stretch its merger control powers. After encouraging several EU Member States to submit a referral according to Art. 22 EU Merger Regulation (EUMR), the EC accepted a referral led by France and asserted jurisdiction over a transaction that was neither notifiable to the EC nor any referring Member State. This marked a departure from the previous understanding that referrals under Art. 22 EUMR were only possible where the referring NCA had jurisdiction to review the merger in the first place. The Court of Justice ultimately rejected the EC’s expansive interpretation of Art. 22. Undeterred, the EC shortly afterwards signalled its intention to pursue other avenues “(…) to ensure that the Commission is able to review those few cases where a deal would have an impact in Europe but does not otherwise meet the EU notification thresholds”. Whether the updated Merger Guidelines will deliver the result remains to be seen.

Watch for the ripples as scrutiny reaches waters far off

These developments all amount to a clear trend: merger control in Europe is becoming more encompassing and assertive. For businesses, especially in innovation-driven markets, this means that merger planning must adapt:

• Expect scrutiny even for small deals: Any deal that could impact competition in a market – even a local or nascent one – might attract a review. The EC and NCAs are willing to take inventive routes (referrals to the EC, using new call in powers or the “Towercast doctrine” if one party is dominant) and the merger control antitrust checklist should therefore be expanded.

• Diligence and documentation: Conduct a thorough competition assessment of even sub-threshold mergers. If your company is dominant in any market, assume the authority may retrospectively question whether an acquired target was a competitive threat. Internal documents should be especially carefully drafted, and the deal rationale documented in terms of procompetitive benefits.

• Consider early engagement with authorities: With new call-in powers, there is often an opportunity (or necessity) to consult NCAs voluntarily. Proactive engagement can provide certainty and avoid an unexpected intervention mid-deal.

• Monitor legislative changes and new precedents: New call-in regimes (like those in France, Belgium and the Netherlands) are on the horizon, and existing ones may be refined. Likewise, court decisions (such as the upcoming ones foreshadowed in Germany for other cases, or further clarifications of Towercast in national courts) will shape how these tools are applied.

BLOMSTEIN will closely monitor further developments and keep you informed. If you have any questions on merger control thresholds, Anna Huttenlauch, Elisa Hauch and Celia Diederichs and the entire team is ready to assist you.