Illumina/Grail merger prohibition holds lessons for innovation sector players

The European Commission’s decision yesterday to prohibit (and unwind) Illumina’s acquisition of Grail really is a big deal, particularly for innovation sectors like tech, bio-tech and pharma. 

Various aspects of the case highlight the EC’s increasing interventionism in innovation markets and its increasing global significance. Points to note include:

• the EC’s initial lack of jurisdiction (because the target had no EU turnover) and reliance on its new Art 22 guidance to call in the deal;
• the unusual, purely vertical, theory of harm;
• the EC’s determination to pursue a ‘gun-jumping’ infringement case, and now divestment orders; and
• the contrasting failure (so far) of the FTC’s case against the deal in the US.

Looking more widely, it’s also worth registering that the EC is very far from alone in pursuing more aggressive intervention in mergers raising innovation issues: the CMA in the UK has been doing likewise.

And the story isn’t over yet: Illumina has announced its intention to appeal the EC prohibition, and the FTC is appealing the first instance judge's rejection of its attempt to block the deal. 

For anyone interested in a little more background, here are:

• the EC prohibition press release
• an FT story confirming Illumina’s intent to appeal
  
• Reuter's story on the FTC appeal in the US   
• an article I co-wrote a little while ago giving more detail on the jurisdiction and gun-jumping issues, as well as related UK case law