European Commission Continues to Pursue "Gun Jumping" Merger Control Proceedings against Illumina and Grail
On 20 August 2021, the European Commission (the Commission) said that it would investigate whether Illumina’s decision, made public on 18 August 2021, to acquire Grail pending the Commission’s review of that transaction under Regulation 139/2004 on the control of concentrations between undertakings (the Merger Regulation) is in breach of the “standstill obligation” provided for by Article 7, Merger Regulation. Pursuant to this provision, a concentration notifiable under the Merger Regulation must not be implemented until after the Commission has approved it (see, Van Bael & Bellis Life Sciences News and Insights of 24 August 2021).
Today, the Commission published a press-release indicating that it sent a Statement of Objections (SO) to Illumina and Grail because it continues to be of the opinion that these firms breached Article 7 by implementing the transaction prior to the conclusion of the Commission's investigation of that transaction. If the Commission’s at this point still preliminary view results in a final decision of the same nature, the Commission will have the power to impose a fine of up to 10% of each company's annual worldwide turnover. The Commission’s SO marks a further, if predictable, step in the procedural war which this transaction has unleashed. Earlier, the Commission had already adopted interim measures in an attempt to avert the possibly irreversible consequences of Illumina’s acquisition of Grail (see, Van Bael & Bellis Life Sciences News and Insights of 29 October 2021).
Not coincidentally, the Commission’s position was bolstered by last week’s judgment by the General Court that the Commission was right in asserting jurisdiction over the transaction pursuant to Article 22 of the Merger Regulation (see, Van Bael & Bellis Life Sciences News and Insights of 14 July 2022). That in-depth review is currently suspended.