Why Europe lacks of champions?

In a tight economic environment, merger control is often accused of being too restrictive and causing Europe’s underperformance.

This is wrong on two counts. While large companies can benefit from economies of scale or network effects, this should not be at the expense of competition. Indeed, numerous studies show that the performance of a company is closely linked to the intensity of competition in its home market. Easing merger control could risk encouraging the emergence of monopolies — driving up margins and prices without delivering real gains in productivity or innovation. The result: European consumers bear the cost, while foreign consumers benefit from exports effectively “funded” by domestic market rents.

Moreover, merger control has only prevented a very small proportion of the transactions analysed.

Nevertheless, the current system can be improved. When analysing mergers, the Commission almost never takes into account the efficiency gains that such mergers could bring about.

“The Commission should show greater openness to efficiency-based arguments and clarify its methodology for assessing them,” recommend Étienne Chantrel and Emmanuel Combe.

Finally, in the context of climate change, it is crucial to recognise that a merger may harm competition while still make a positive contribution to environmental objectives.

Read the full article by Étienne Chantrel, Partner at Eight Advisory, co-authored with Emmanuel Combe, University Professor at Paris 1 Panthéon-Sorbonne University and former Vice-President of the French Competition Authority, published in Le Monde on May 30, 2025 (available in French).