EU Court Sides with Illumina in High-Profile Merger Case

The Court of Justice of the European Union (CJEU) has sided with U.S. gene sequencing company Illumina in its legal battle against the European Commission’s scrutiny of its $7.1 billion acquisition of cancer diagnostic firm Grail. This ruling is set to significantly limit the European Union’s authority to oversee certain mergers.

The case centers around Illumina’s contentious purchase of Grail, a company it originally founded and spun off in 2016 before reacquiring in 2021. The European Commission had used Article 22—a rarely applied provision—to investigate the merger despite it falling below the EU’s standard revenue thresholds for such reviews.

The investigation was closely watched by various industry players concerned about potential overreach by EU regulators, particularly in cases involving so-called “killer acquisitions,” where larger firms acquire startups with the intent of stifling competition.

In a previous ruling in 2022, the EU’s General Court had supported the Commission’s decision following appeals from several member states. However, the CJEU’s recent verdict overturns this decision, declaring that the Commission had exceeded its authority. According to the CJEU, the Commission cannot accept referrals from national authorities if these bodies do not have jurisdiction under their own national laws.

Read more: EU Approves Illumina’s Divestment Plan for Grail After Two-Year Battle

Following the ruling, Illumina announced that it would not be required to pay a €432 million ($478 million) fine previously imposed by the Commission for proceeding with the acquisition before obtaining approval. The company expressed satisfaction with the judgment, asserting that the fine was unjustified and that the Commission’s jurisdiction had been improperly asserted.

The European Commission has stated it will review the implications of the judgment and consider future steps to ensure it can still address mergers impacting Europe, even if they do not meet the EU’s notification criteria.

(Cases C-611/22 P Illumina v Commission and C-625/22 P Grail v Commission

Soource: Reuters