The European Commission and Art 22 referrals: a way around?

Following the judgment of the European Court of Justice (ECJ) in the Illumina/Grail case quashing the Commission's powers to review transactions below the EU merger thresholds, we have all been waiting for what the Commission would do. One route that we all suspected the Commission could use was referral of cases by NCAs that were below national merger thresholds. Since the novel interpretation of Art 22 EUMR, several member states such as Italy and Ireland have introduced, in national law, the power to review transactions below their thresholds. 

On 31 October 2024, the European Commission accepted a request from Italy to review the acquisition of Run Labs Ltd, an Israeli-based GPU orchestration software provider, by NVIDIA Corporation, a global leader in GPU technology headquartered in the United States.  

Though this acquisition doesn’t meet the EU Merger Regulation’s notification thresholds, Italy’s competition authority invoked its ‘call in’ powers due to potential competition concerns. These powers enable the  authority to review transactions not meeting the relevant national turnover thresholds in specific cases.

Under Article 22(1) of the EU Merger Regulation, Italy requested that the European Commission assess the merger, given its potential to affect trade and competition across EU member states, especially within Italy. The European Commission preliminarily concluded that the transaction could significantly impact competition in the European Economic Area (EEA), including Italy. As a result, it has instructed NVIDIA to notify the transaction and pause implementation until the Commission completes its assessment and provides clearance.