Abstract
EU merger law recognizes rivalry as the sole source of innovation incentives. Such a narrow focus is misguided. Innovation is driven by competitive pressure, and rivalry is not its only source. Building on Schumpeter’s notion of innovation as an “ever-present threat”, the paper shows how economic, technological, and legal contexts can generate powerful innovation incentives. Expanding demand, user–producer interactions, technological opportunities, and regulatory frameworks often compel firms to innovate even in the absence of rivalrous pressure. The analysis demonstrates that while the European Commission has occasionally acknowledged these contextual drivers, it lacks a systematic framework for assessing them. Drawing on the Court of Justice’s case law, the paper suggests that contextual drivers should be evaluated with greater completeness, coherence, and concreteness. Doing so would enhance predictability and better align merger control with the realities of innovation.