The gift that keeps on giving: Article 22 is here to stay

On 31 October 2024, the Commission announced it had accepted a referral request under Article 22 of the EU Merger Regulation (EUMR) from Italy to assess the proposed acquisition of Run:ai by NVIDIA. NVIDIA has since notified the deal to the Commission.

NVIDIA supplies Graphics Processing Units (GPUs), while Run:ai is a start-up whose GPU technology helps its customers manage and optimise their AI infrastructure. Given the Commission’s focus on AI, its interest in this acquisition is no surprise.

According to the Commission, the acquisition meets the referral conditions of Article 22 EUMR because:

• the acquisition threatens to significantly affect competition in markets (probably at least EEA-wide, i.e. including the Italian market) in which NVIDIA and Run:ai are active; and
• the Commission is “best placed to examine the acquisition given its knowledge and case experience in related markets”.

Article 22 referral after Illumina/Grail judgment

This is the first referral by a national competition authority exercising its call-in powers since the ECJ ruled that the EUMR does not allow the Commission to accept referrals from NCAs that lack jurisdiction under their national laws (see our September 2024 newsletter).

On the day of the ECJ’s judgment, the Commission issued a statement stressing its continued willingness to accept referrals under Article 22 EUMR and the existent call-in powers of several NCAs. Currently, only eight Member States have call-in powers – not including the deal-value thresholds of Austria and Germany – and these powers are subject to restrictions on scope (e.g. Italian law includes a condition that the transaction must pose concrete risks for competition). The call-in powers by NCAs thus do not cover the complete range of transactions that the previous interpretation of Article 22 EUMR did. Nevertheless, the Commission seems to consider them an important plug of at least part of the enforcement gap resulting from the ECJ’s judgment. 

Italy has now answered the Commission’s call for action and more countries will inevitably follow, especially since several Member States are contemplating granting call-in powers to their NCAs.

Developments in the Netherlands

The Dutch NCA (ACM) has been outspoken in the past about its wish to have call-in powers. It repeated this message in a blog posted on 7 November 2024, in which it proposed letting the introduction of new call-in powers go hand in hand with an increase of the current turnover thresholds to lower the regulatory burden.  

It seems that its concerns over its lack of such powers have been heard. In a recent letter to Parliament, the Dutch Minister of Economic Affairs indicated that he would identify the possibilities of addressing killer acquisitions by the ACM and would inform Parliament of his next steps in early 2025. Interestingly, he would consider not only the introduction of call-in powers, but also other options, such as an asymmetric turnover threshold (i.e. to review mergers where turnovers of the undertakings concerned differ significantly). Depending on the way it is drafted, the latter option may offer companies more legal certainty.

Conclusion

Even though the ECJ quashed the overly expansive interpretation of Article 22 EUMR by no longer allowing referrals when no NCA has jurisdiction, deals that do not meet standard EU and national merger thresholds are by no means in the clear. Companies should be aware that their deal may still be caught by national call-in regimes. 

Moreover, the NVIDIA/Run:ai referral has demonstrated the appetite of (i) NCAs to provide referrals on this basis and (ii) the Commission in its turn to accept those referrals. Since more NCAs, including the ACM, are interested in gaining call-in powers, this appetite will only increase.