Article 22 Trends In Pharma M&A: Call-In Powers And Timing

Article 22 and the Pharma Context

Competition authorities in Europe have for years grown increasingly concerned about so-called "killer acquisitions," particularly in life sciences where targets often have high innovation potential but little or no turnover. These are transactions where the acquired company's competitive significance lies in its pipeline, R&D or intellectual property rather than its financials. Such deals can escape traditional turnover-based merger control thresholds, yet – the authorities argue – may still raise serious concerns about future (i.e., potential) competition and innovation. That said, the label "killer acquisition" is something of a misnomer. In practice, transactions undertaken solely to eliminate innovation from a smaller rival are exceedingly rare.

To address this risk, the European Commission has encouraged greater use of Article 22 of the EU Merger Regulation (EUMR), which allows Member States to refer cases for EU review even if they do not meet EU thresholds. Subject to potential further developments, two recent judgments, the Court of Justice's ruling in Illumina/GRAIL and the General Court's decision in Brasserie Nationale, now provide the leading interpretation of how Article 22 operates in practice, particularly in relation to call-in powers and timing of referrals.

The Emergence of Call-In Powers

The Illumina/GRAIL judgment clarified that Article 22 is not a free-floating tool: a Member State may only request an Article 22 referral if it has jurisdiction under its own law. That has elevated the importance of national call-in powers, which allow Member State competition authorities to review below-threshold deals and investigate whether they pose competition risks.

Normally, merger review takes place only where national thresholds are met. Indeed, exceeding those thresholds typically creates an obligation to seek approval and suspend closing until such approval is granted. National call-in powers extend that reach. If a deal satisfies a national call-in condition, the authority can investigate even if the mandatory threshold is not triggered. The authority may itself review the deal or may request a referral to the Commission under Article 22, provided the two Article 22 conditions also are satisfied (the transaction affects trade between Member States and threatens to significantly affect competition within the referring State). In Member States without any merger control regime, an authority may refer directly under Article 22 if those two conditions are met. For its part, the Commission cannot act ex officio under Article 22: a referral request from a Member State is always required, but, in practice, the Commission can always encourage a Member State to exercise that power.

This framework has already been tested. In 2024, the Italian Competition Authority (AGCM) exercised its call-in power in relation to NVIDIA's proposed acquisition of Run:ai. The AGCM required notification and then referred the case to the Commission under Article 22. The Commission accepted Italy's request in October 2024 and cleared the transaction unconditionally in December 2024. The case marked the first time a national call-in was followed by an Article 22 referral after Illumina/GRAIL, underscoring that deals in which the target has no or very minimal revenues are not insulated from scrutiny. That is particularly relevant in innovation-driven areas, but may also be relevant more generally for acquisitions of smaller existing or nascent competitors.

A number of EU and EEA countries already have call-in powers in place, including Denmark, Germany, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Norway, Slovenia and Sweden. Others are reportedly contemplating similar mechanisms, among them France, Belgium, the Netherlands, Finland, Czechia and Greece. In most jurisdictions, a standstill obligation applies once a deal is called in, preventing closing until clearance. Ireland is unusual: closing is permitted, but the authority may impose interim measures or even unwind the deal post-completion. If reforms in the jurisdictions currently contemplating such powers are adopted, the scope for reviewing below-threshold deals under Article 22 will expand further, increasing the need for dealmakers to assess call-in risk alongside traditional turnover thresholds.

The local nexus requirement under the spotlight

That being said, this legal framework is far from settled. NVIDIA has appealed the Commission's decision to accept the referral under Article 22, contending that the Commission lacked jurisdiction because the transaction did not meet either EU or Italian notification thresholds and was only captured via discretionary call-in powers. NVIDIA argues that this approach undermines legal certainty, institutional balance, proportionality and equal treatment, and is inconsistent with the legitimate history, purpose and limits of Article 22. A central issue is whether a national authority may invoke broadly defined call-in powers to create jurisdiction absent a clear local nexus. Should the EU Courts uphold NVIDIA's appeal, some national authorities may need to reformulate or constrain their call-in regimes to ensure they are sufficiently precise, predictable, and proportionate.

In fact, most jurisdictions already require some form of local nexus to call in a transaction. That is to say, there must be a sufficient connection between the parties or the transaction and the jurisdiction for the national authority to assert jurisdiction. While the specific requirements vary significantly by jurisdiction, this nexus is generally established by (i) a minimum level of revenue or (ii) some form of local presence even without revenue (e.g., warehouses, employees, clinical trials) or (iii) in some systems, a theory of anticompetitive effects that could materialize in the national market – including potentially through demonstrable efforts to enter the market – even absent revenue or presence. It is this third, effects-based nexus that may be most vulnerable if the EU Courts restrict the permissible scope of Article 22 referrals.

Brasserie Nationale: Timing and Information

The Brasserie Nationale judgment by the General Court in July 2025 provided a necessary clarification on referral timing. Luxembourg, which has no national merger control regime, referred a domestic transaction under Article 22. The Court upheld the Commission's acceptance of that referral and explained when the 15-working-day referral window begins: only once a national authority has been actively provided with sufficient information to make a preliminary competition assessment. General publicity (such as press releases) is not enough; what matters is the transmission of details that enable an authority to evaluate the transaction.

For life sciences companies, where acquisitions often hinge on pipeline value rather than turnover, this clarification underscores how the content and sequencing of disclosures directly shape referral risk. Only once sufficient information reaches an authority does the 15-day clock start running. It will be for the parties to provide that information in response to authority requests, and it may be strategically advantageous to prepare materials addressing the likely competition issues in advance of a deal announcement or immediately thereafter.

Practical Strategy for Pharma Deals

For high-profile life sciences transactions that do not trigger EU or national filings, the combination of call-in powers and Brasserie's timing raises a practical question: how to manage referral risk?

• In some cases, a briefing paper to the Commission may be sensible. While there is no mechanism requiring the Commission to notify all Member States of such a submission, persuading Brussels that a case does not warrant Article 22 scrutiny can be influential in practice.
• Consider having briefing papers ready to go to potentially interested Member States, explaining why the deal does not merit referral. This can start the 15-day clock and reduce uncertainty under Article 22, and possibly avoid a national call-in. There may be exceptions where it is worth proactively submitting such papers, but more often may make sense for the parties to wait and see if questions are raised.

Conclusion

The Illumina/GRAIL ruling tied Article 22 referrals firmly to national jurisdiction, while Brasserie Nationale provided a necessary clarification on when the referral clock starts. Together with the spread and contemplated expansion of call-in powers, and their actual use in cases such as NVIDIA/Run:ai, these developments confirm that below-threshold transactions remain exposed to EU scrutiny.

Although Illumina/GRAIL narrowed the Commission's discretion, the gap it left is only partly closed. With more national authorities adopting or considering call-in powers, Article 22 has moved from being a peripheral "backstop" to a mainstream feature of merger control enforcement.

NVIDIA's appeal may narrow national authorities' discretion to call in transactions, but Article 22 itself is likely here to stay.

For life sciences dealmakers, the message is simple but important: below-threshold does not mean below-scrutiny. In a sector where innovation defines competition, careful jurisdictional mapping, disciplined disclosure management and timely engagement with authorities are now essential steps to protect deal certainty.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.