Illumina Challenges EU Antitrust: In a bold move, Illumina is challenging the European Union’s antitrust regulators over their examination of the company’s acquisition of Grail. The $7.1 billion deal is at the center of a debate over the regulatory authority’s use of a seldom-invoked power known as Article 22. This power allows the EU to scrutinize “killer acquisitions,” where larger companies acquire smaller rivals with the intention of shutting them down.
The European Commission’s determination to apply Article 22, even when deals fall below the EU merger revenue threshold, signals a tougher regulatory approach. This move has sparked concerns among companies and start-ups, especially those eyeing buyouts from larger rivals.
Illumina, a U.S. life sciences company, has taken its fight to the Court of Justice of the European Union (CJEU) after an unsuccessful challenge at a lower tribunal last year. The company contends that the EU competition authority overstepped its boundaries by reviewing the Grail deal, which was outside the scope of EU merger rules.
Also Read: Illumina Grail purchase investigation: SEC Investigates $7.1 Billion Purchase Amid Controversy
“Illumina and Grail’s arguments are essentially a policy manifesto about what they think should be the jurisdictional limits of EU merger control,” remarked Nicholas Khan, the Commission’s lawyer, during the proceedings. He dismissed Illumina’s claims, stating they amounted to a demand to rewrite the merger regulations.
Illumina’s lawyer, Daniel Beard, argued that the EU merger regulation does not confer on the Commission the power to control mergers falling below the specified thresholds. “Article 22 is a derogation, not a catch-all. It is to be construed strictly,” he emphasized before the panel of 15 judges.
If Illumina loses its appeal, it has committed to divesting Grail within a year. The case could have broader implications for future deals subject to EU scrutiny. Meanwhile, the Commission continues to exercise its Article 22 power, as it reviews other transactions, including Qualcomm’s bid for Autotalks and the European Energy Exchange’s acquisition of Nasdaq‘s European power trading and clearing business. The outcome of this legal battle will shape the landscape of EU antitrust regulation and its impact on mergers and acquisitions.
Our Reader’s Queries
Did Illumina challenge Brussels over any block on Grail merger?
Illumina has appealed the EU’s General Court’s decision to investigate the deal last year to the bloc’s top court. The company has argued that the merger shouldn’t have been reviewed by the EU since Grail doesn’t generate any revenue in the bloc.
What is the FTC case against Illumina?
In March 2021, the FTC took issue with Illumina’s acquisition of Grail, claiming that the move would stifle innovation in the U.S. market for multi-cancer early detection (MCED) tests. The FTC also argued that the acquisition would lead to higher prices and fewer options for consumers, ultimately resulting in a decrease in the quality of available tests.
What is the EU ruling on Grail?
To maintain the independence of Illumina and Grail, interim measures were put in place to prohibit the exchange of confidential business information between the two companies. However, the EU found that the acquisition breached anti-trust regulations and ordered Illumina to divest Grail in September 2022.
Which countries are merger control in the EU?
With the exception of Liechtenstein and Luxembourg, all EU/EEA Member States have their own unique merger control laws that may be applicable. These laws are governed by specific jurisdictional thresholds that vary from country to country.