Illumina/GRAIL, Chapter 1: the unexpectedly broad merger control powers of the European Commission

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This paper discusses the judgment of 13 July 2022 of the General Court of the European Union (GC) in Case T-227/21, Illumina v Commission, a case that turns on the scope of the powers and jurisdiction of the European Commission in the field of merger control. The dispute arose from the acquisition by one U.S. company, Illumina, Inc., of another, GRAIL, Inc. The companies are active in, respectively, the fields of genomics and health care. Subsequently, in September 2022 the Commission adopted a prohibition decision against the parties on the ground that the acquisition was likely to limit innovation and user choice in the field of cancer screening tests that incorporate next-generation sequencing technology. In this case, which remains subject to further appeals on both procedural and substantive questions including the Commission’s decision on the merits, the GC held that a referral by a Member State of a concentration to the Commission for its appraisal and approval is legally possible even when the concentration (a) falls outside of the established notification triggers under the national merger laws of the referring Member State, and furthermore (b) lacks a “European dimension” under Regulation 139/2004 (the EU Merger Regulation, i.e. the “EUMR”). In so holding, the GC adopted an interpretation of Article 22 EUMR that appears to expand the scope for national competition authorities to request such referrals even when the nexus to the EU and its Member States is unclear.
Beyond its relevance to oncological medicine, the judgment has wider significance as well. In particular, the way in which Article 22 EUMR is interpreted may impact the Commission’s ability to assess the effects of concentrations in certain cases where the competitive significance of a target company may be understated due to deceptively low levels of current turnover—notably, in sectors where innovation is an important parameter of competition. However, the paper suggests that the use of Article 22 as a mechanism for policing “killer acquisitions”, or similar transactions that would suppress nascent competition, is questionable. In particular, the introduction of a novel approach to the established referral mechanism may undermine legal certainty. If the European Court of Justice (ECJ) endorses the GC’s approach, then Article 22 could conceivably become a default option in the context of non-notifiable concentrations, rather than the exception. The ECJ now has a unique opportunity to consider that risk, and to define the limits of the referral mechanism while determining safeguards needed to maintain the integrity of a transparent and predictable multi-level legal system that does not extend the Commission’s extraterritorial jurisdiction too far.
TidsskriftE C L R: European Competition Law Review
Udgave nummer4
Sider (fra-til)162-174
StatusUdgivet - mar. 2023

ID: 337857598