US Appeals Court Rejects FTC: In a recent development, a U.S. appeals court has overturned a Federal Trade Commission (FTC) order against Illumina’s acquisition of cancer diagnostic test maker Grail, citing an application of the wrong legal standard. The 5th U.S. Circuit Court of Appeals in New Orleans issued a 34-page order, asserting that the FTC must reconsider the deal.
While acknowledging substantial evidence from the FTC indicating potential competition reduction in the market for cancer detection blood tests, the court criticized the agency for not adequately considering Illumina’s commitment to continuing the sale of its DNA sequencing services to other firms. Illumina had offered contracts to supply any of Grail’s rivals and committed not to raise prices.
“We are reviewing the decision,” Illumina stated in response to the ruling. Despite Illumina’s argument that the FTC unconstitutionally exercised its powers, the court dismissed such claims, citing binding Supreme Court precedent.
Also Read: Illumina Challenges EU Antitrust Powers Over Grail Deal, Sparks Debate on Merger Rules
San Diego-based Illumina filed the appeal in June, challenging the FTC’s demand for divestment, alleging a denial of due process. Grail, valued at $7.1 billion under Illumina’s acquisition, aims to market a potent test for diagnosing various cancers through a single blood test, known as a liquid biopsy. The FTC expressed concerns about Illumina’s dominant position in DNA sequencing and the potential consequences for pricing and access to Grail’s rivals.
The FTC initially filed a complaint in March 2021, which was rejected by an FTC administrative law judge. After an appeal, the case was reinstated, leading Illumina to challenge it in an appeals court.
Despite legal battles in the U.S. and Europe, Illumina completed the acquisition of Grail in mid-2021. Europe has proposed measures for Illumina to unwind the acquisition, with Illumina arguing that it does not conduct business in Europe, challenging the EU competition enforcer’s jurisdiction. The court’s decision adds complexity to the ongoing regulatory scrutiny surrounding Illumina’s acquisition of Grail.
Our Reader’s Queries
What is the appeal process for the FTC?
In specific instances, such as certain merger cases, the Commission’s regulations dictate that an appeal is automatic. Once an initial decision is appealed, the Commission reviews briefs, conducts oral arguments, and ultimately releases its own final decision and order.