“The European Commission has fined Illumina and GRAIL approximately €432 million and €1,000 respectively, for implementing their proposed merger before approval by the Commission, in breach of EU merger control rules,” said the Commission.
Illumina had questioned the European Commission’s right to scrutinise the merger, arguing that Grail does not have any revenues in Europe.
The genetic testing firm has also accused the EU of putting lives at risk by blocking a merger that aims to bring to the market a blood test to screen dozens of different cancers.
Illumina has said the Commission had no jurisdiction over the transaction which is between two American companies with no foreseeable impact on European competition.
Illumina criticised the fine as “unlawful, inappropriate, and disproportionate” and said it would appeal the penalty.
The Commission said: “EU merger rules require that merging companies not to implement mergers until approved by the Commission (the standstill obligation).
“It is a cornerstone of the European merger control system, that enables the Commission to carry-out its role before structural changes modify the competitive landscape.
“In July 2021, the Commission opened an in-depth investigation into Illumina’s acquisition of GRAIL. In September 2022, the Commission blocked the transaction over concerns that it would have significant anticompetitive effects, stifling innovation and reducing choice in the emerging market for blood-based early cancer detection tests.
“In August 2021, however, while the Commission’s review was still ongoing, Illumina publicly announced that it had completed its acquisition of GRAIL. On this date, the parties executed all documents needed to complete the transaction.
“Moreover, GRAIL merged with two wholly-owned subsidiaries of Illumina. The latter also paid GRAIL’s shareholders for their shares.
“In July 2022, the Commission sent Illumina and GRAIL a Statement of Objections finding on a preliminary basis that they breached the EU Merger Regulation by implementing their tie-up prior to the conclusion of the Commission’s in-depth investigation.
“In today’s decision, the Commission confirms its preliminary view that Illumina and GRAIL intentionally breached the standstill obligation. The Commission found that by closing the transaction Illumina was able to exercise a decisive influence over GRAIL and it actually exercised it …
“According to the EU Merger Regulation (EUMR), the Commission can impose fines of up to 10% of the aggregated turnover of companies, which intentionally or negligently breach the standstill obligation.
“In setting the amount of the fines, the Commission considers the gravity of the infringement as well as the existence of mitigating or aggravating circumstances. The fine must also ensure a sufficiently dissuasive and deterrent effect.
“Illumina and GRAIL knowingly and intentionally breached the standstill obligation during the Commission’s in-depth investigation. This is an unprecedented and very serious infringement undermining the effective functioning of the EU merger control system.”