Public Funding as a Call-in Gateway: Narrowing the Sub-Threshold Gap in German and EU Merger Control

The default trigger for merger control across the EU is turnover, yet many acquisitions that raise innovation concerns, in particular the takeover of young, innovation-intensive firms by established incumbents, systematically escape it, since such targets generate little turnover at the time of sale.

After the CJEU’s Illumina/GRAIL judgment effectively closed the Article 22 EUMR referral route for purely sub-threshold transactions, this enforcement gap has widened. Transaction-value thresholds capture only part of the problem, and the data needed to assess the true scale of the gap is largely undisclosed.

The thesis proposes a novel way to identify the sub-threshold acquisitions that merit scrutiny: a firm's prior receipt of competitive public funding. A firm that has been awarded substantial funding by a selective public programme has typically been screened and judged to be innovative and capable of scaling, precisely the qualities that turnover and transaction-value thresholds fail to capture. That screening is not decisive on its own, but as an indicator, and combined with the public interest in seeing that the funding ultimately benefits the market, it justifies at least a mechanism allowing the authority to take notice.

Tying a light information duty to past public funding could act as an identification funnel: funding status can be added as an independent triggering criterion alongside the transaction value within the German transaction-value regime, while leaving the decision to examine flagged cases to the authority's discretion.