The European Court of Justice ruled that the European Commission (EC) did not have jurisdiction over Illumina's acquisition of Grail, reversing a ruling by a lower court that dismissed Illumina's appeal and overturning a €432 million ($477.8 million) fine that had been levied by the EC against Illumina.
The court also ordered the EC to pay the costs incurred by Illumina and Grail in the court of first instance and during the appeal proceedings.
In its ruling, the European Court of Justice said that the EC misinterpreted competition regulations in considering requests from several national merger control authorities (i.e., those of France, Greece, Belgium, Norway, Iceland, and the Netherlands.) The ruling stated that the regulations didn't apply to Illumina's acquisition of Grail because the required minimum thresholds for annual business were not met: Grail was not doing business in those member states at that time.
"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," EC Executive Vice-President Margrethe Vestager said in a statement on the ruling, noting also that "certain transactions that do not reach EU notification thresholds may nonetheless be harmful to competition in Europe," and stating that "[t]he 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."
Illumina was ordered to divest itself of Grail by both the EC and the U.S. Federal Trade Commission (FTC); Grail spun off as an independent company in late June. However, Illumina maintains a minority share of 14.5% in Grail; in a statement, Illumina noted that it will continue to support Grail with its sequencing technology and services.
The FTC issued an order to dismiss its case against Illumina on August 15 following the divestiture of Grail.
