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Luxembourg, 3 September 2024

Judgment of the Court in Joined Cases C-611/22 P – Illumina v Commission and C-625/22 P Grail v Commission and Illumina

Illumina-Grail merger: the Court of Justice sets aside the judgment of the General Court and annuls the decisions by which the Commission accepted requests from national competition authorities seeking the examination of the proposed concentration

The Commission is not authorised to encourage or accept referrals of proposed concentrations without a European dimension from national competition authorities where those authorities are not competent to examine those proposed concentrations under their own national law

On 21 September 2020, Grail LLC, a US company that develops blood tests for the early detection of cancer, and Illumina Inc., a US company specialised in genetic analysis solutions, made public a proposal on the acquisition by Illumina of sole control over Grail. Since the concentration did not have a European dimension in particular given the fact that Grail had no turnover either in the European Union or elsewhere in the world, it was not notified to the Commission. Moreover, it was not notified in the Member States or in the States party to the Agreement on the European Economic Area (EEA), since it failed to reach the relevant national thresholds.

Having received a complaint concerning that concentration, the Commission invited the Member States to submit to it, in accordance with the Merger Regulation 1, any requests for it nonetheless to examine that proposed concentration, on the ground that it may affect trade between the Member States and threaten to significantly affect competition within their territory. The Commission received such a request from the French competition authority, which was joined by the Greek, Belgian, Norwegian, Icelandic and Dutch competition authorities. By its judgment in Illumina v Commission 2, the General Court dismissed Illumina’s action challenging the decisions by which the Commission accepted the main request and the requests to join it. Illumina and Grail each lodged an appeal against that judgment.

The Court of Justice sets aside the judgment of the General Court and annuls the Commission decisions at issue.

The Court of Justice finds that the General Court erred in concluding that a literal, historical, contextual and teleological interpretation of the Merger Regulation allowed national competition authorities to ask the Commission to examine a concentration that not only lacks a European dimension but also falls outside their competence to review such a concentration on account of the fact that it does not reach the applicable national thresholds. In particular, the General Court erred in establishing that that regulation provides for a ‘corrective mechanism’ for the effective control of all concentrations with significant effects on the structure of competition in the European Union.

According to the Court of Justice, the General Court’s interpretation is liable to upset the balance between the various objectives pursued by that regulation. In that regard, the Court of Justice finds that the thresholds set for determining whether or not a transaction must be notified are an important guarantee of foreseeability and legal certainty for the undertakings concerned. Those undertakings must be able easily to determine whether their proposed transaction must be the subject of a preliminary examination and, if so, by which authority and subject to what procedural requirements.

NOTE: An appeal, on a point or points of law only, may be brought before the Court of Justice against a judgment or order of the General Court. In principle, the appeal does not have suspensive effect. If the appeal is admissible and well founded, the Court of Justice sets aside the judgment of the General Court. Where the state of the proceedings so permits, the Court of Justice may itself give final judgment in the case. Otherwise, it refers the case back to the General Court, which is bound by the decision given by the Court of Justice on the appeal.

Unofficial document for media use, not binding on the Court of Justice. The full text and, as the case may be, the abstract of the judgment is published on the CURIA website on the day of delivery.

1 Article 22 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings.

2 Judgment of 13 July 2022, Illumina v Commission T-227/21 (see also press release No 123/22).

 


Statement by Executive Vice-President Margrethe Vestager on today’s Court of Justice judgment on the Illumina/GRAIL merger jurisdiction decisions

Brussels, 3 September 2024

Today’s judgment by the Court of Justice annuls the Commission’s decisions to examine the proposed acquisition of GRAIL by Illumina. In those decisions, the Commission accepted requests by Belgium, France, Greece, Iceland, the Netherlands and Norway to review the transaction pursuant to Article 22(3) of the Merger Regulation. We will carefully study the judgment and its implications.

There will continue to be a need to review mergers that have a competitive impact in Europe. The Commission’s 2021 Evaluation on the procedural aspects of EU merger control found, after a public consultation, extensive engagement and research into deal activity, that certain transactions that do not reach EU notification thresholds may nonetheless be harmful to competition in Europe. A company with limited turnover may still play a significant competitive role on the market, as a start-up with significant potential, or as an important innovator. Killer acquisitions seek to neutralize small but promising companies as a possible source of competition. These companies’ size is often dwarfed by the large corporations that seek to acquire them, and they should be protected against the risk of elimination.

Going forward, in compliance with today’s judgment, the Commission will continue to accept referrals made under Article 22 of the Merger Regulation by Member States that have jurisdiction over a concentration under their national rules where the applicable legal requirements are met. In the last few years, several Member States have introduced provisions allowing them to request the notification of transactions that do not meet national thresholds, in situations where they might have a significant competitive impact. The possibilities for referrals to the Commission under Article 22, in compliance with today’s judgment, are thus already more extensive than they were at the time of the Illumina/GRAIL referral. More generally, we will consider the next steps to ensure that the Commission is able to review those few cases where a deal would have an impact in Europe but does not otherwise meet the EU notification thresholds.

Source – EU Commission

 

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