On September 6, 2022, the Commission prohibited the acquisition by Illumina, a U.S.-based company specializing in genomic sequencing, of GRAIL, a U.S.-based start-up developing early cancer detection tests based on genomic sequencing.[1] The decision marks the first Commission review and prohibition of a transaction falling below the EU Merger Regulation (“EUMR”) and national notification thresholds.


Illumina is a global genomics company that focuses on next-generation sequencing (“NGS”) instruments and consumables. GRAIL is a start-up developing early cancer detection tests based on genomic sequencing and data science tools. The transaction is thus purely vertical in nature, with Illumina operating upstream of GRAIL.

In September 2020, Illumina announced its acquisition of GRAIL for $8 billion. The transaction was not reportable at the EU or Member State level as GRAIL had—and still has—not launched a product on the market and had no sales in the EEA. In March 2021, the French Competition Authority referred the transaction to the Commission for review under Article 22 EUMR.[2] The Commission accepted the referral request in April 2021 and requested that the merging parties notify the transaction to the Commission.

Illumina notified the transaction to the Commission in June 2021 but closed it in August 2021, in violation of the standstill obligation. The Commission prohibited the transaction on September 6, 2022.[3]

The Prohibition Decision

On September 6, 2022, almost two years after its announcement, the Commission prohibited the transaction on input foreclosure grounds. The Commission noted that post-transaction, Illumina would have the ability and incentive to foreclose GRAIL’s putative competitors and potential new entrants, thereby putting GRAIL’s putative competitors at a disadvantage in the early cancer-detection testing market:

  • The Commission found that Illumina would have the ability to foreclose GRAIL’s putative rivals. The Commission noted that Illumina’s NGS systems were critical inputs for the development of new early cancer detection tests. The Commission highlighted that GRAIL’s putative competitors require cutting-edge “high-throughput NGS systems with a reliable support network and a solid track record.”[4] The Commission considered that Illumina was the only suitable supplier of NGS systems in the short to medium-term, in a market characterized by significant barriers to entry and high switching costs. Accordingly, the Commission was concerned that Illumina could withhold GRAIL’s putative rivals’ access to its own NGS technology or refuse to assist rivals.
  • The Commission found that Illumina would have the incentive to foreclose GRAIL’s putative rivals in a market that has “enormous potential” and which has “ongoing close innovation competition. The Commission found that Illumina would benefit from foreclosure in a market that was set to be highly lucrative and was expected to reach more than €40 billion per annum by 2035. The Commission’s investigation explored the nature of GRAIL’s product, Galleri. The Commission deemed that GRAIL enjoyed a first-mover advantage, but nonetheless faced competitive constraints from several players who were developing early cancer detection tests that would directly and closely compete with Galleri in the near future absent the transaction. Basing its assessment on a 12-year timeframe, the Commission concluded that Illumina would have the incentive to foreclose GRAIL’s putative rivals “already today despite benefitting from this action only at a later stage.”[5]
  • The Commission dismissed Illumina’s proposed remedies. To address the Commission’s concerns at the upstream level, Illumina offered to license some of its gene- sequencing technology patents to NGS suppliers and to stop patent lawsuits in the U.S. and in Europe against the Chinese NGS supplier BGI Genomics for three years. The Commission found the commitments insufficient as, among others, putative rivals would require access to other Illumina patents in any event. To address concerns at the downstream level, Illumina committed to supply GRAIL’s putative rivals until 2023. But the Commission noted that Illumina’s commitments did not remove the risk of Illumina degrading technical support for its NGS systems and that they would be complex to monitor.


The Illumina/GRAIL saga has broken new procedural and substantive legal grounds and promises to continue doing so:

  • From a procedural standpoint, Illumina/ GRAIL stands out for its intricacies and retroactive application of the Commission’s revised Article 22 EUMR policy. The Commission requested a referral of the transaction in February 2021 and accepted the referral from the French Competition Authority in March 2021, before it introduced changes to the Article 22 EUMR policy in late March 2021. At the time the Commission called in the transaction, its policy was to discourage referrals, as was confirmed by Commissioner Vestager in a speech she gave ten days after the parties announced the transaction.[6]
  • From a substantive standpoint, Illumina/ GRAIL reshapes the Commission’s innovation- based theories of harm. It not only confirms the Commission’s increasing scrutiny of vertical mergers, but also marks the first prohibition of a vertical merger on grounds of risks to innovation.
  • The decision is also noteworthy for its departure from the Commission’s analytical framework in past innovation cases: while precedents focus on the merging parties’ incentives to innovate in a horizontal setting,[7] Illumina/GRAIL instead focuses on the merging parties’ putative rivals’ incentive to innovate in a vertical context. The Commission’s novel approach creates significant uncertainty on the standards the merging parties would need to meet in vertical mergers involving innovation-intense industries, such as pharmaceuticals and technology.
  • As to remedies, the Commission’s rejection of Illumina’s proposed commitments confirms the Commission’s skepticism of non-divestiture remedies in vertical cases. The decision suggests that a satisfactory remedy should have maintained competition in the innovation race among third parties in a potential market for the production of early cancer detection blood-based tests. Such a threshold may be unattainable, as one must wonder what remedies, if any, Illumina could have convincingly offered to incentivize third parties in the innovation race.
  • And finally, from a cross-jurisdictional standpoint, Illumina/GRAIL stands out as one of a handful cases of dividing the Atlantic. In a judgment announced only five days before the Commission’s prohibition decision, a Chief Administrative Law Judge in the U.S. dismissed the FTC’s challenge of the acquisition. The Judge found that Illumina had long been the only viable NGS technology supplier, and, as such, its ability to foreclose GRAIL’s putative competitors pre-dated the transaction. However, looking at the same timeframe as the Commission, the Judge deemed that while Illumina might profit from foreclosure in 12 years, this did not indicate that it had a current or near-term incentive to harm GRAIL’s putative rivals.[8] The Judge found that the FTC did not present credible evidence that GRAIL’s putative rivals would imminently launch their products, and even if they did, there was no assurance that the products would be in direct competition with GRAIL’s.[9]

Illumina has already announced that it will appeal the decision to the General Court.[10] In the meantime, the Commission is expected to adopt an Article 8(4) EUMR decision requiring Illumina and GRAIL to unwind the transaction it closed but did not implement, by keeping GRAIL as a distinct entity. The parties will have the possibility to appeal this decision and seek interim relief suspending the divestment of GRAIL until the final determination of these appeals, promising us many more seasons of the Illumina/GRAIL saga.

[1]      Illumina/GRAIL (Case COMP/M.10188), Commission decision of September 6, 2022.

[2]      National competition authorities in Greece, Belgium, Norway, Iceland and the Netherlands later joined the referral request.

[3]      On October 28, 2022, the Commission renewed and adjusted its hold separate and interim measures orders initially imposed on October 29, 2021. We cover these developments in our October 2021 and October 2022 EU Competition Law Newsletters.

[4]      See Commission Press Release IP/22/5364, “Mergers: Commission prohibits acquisition of GRAIL by Illumina,” September 6, 2022.

[5]      Illumina/GRAIL (Case COMP/M.10188), Commission decision of September 6, 2022. The press release is accessible here.

[6]      Commissioner Vestager, The future of EU merger control, Speech to the International Bar Association 24th Annual Competition Conference, September 11, 2020.

[7]      See e.g., Dow/Dupont (Case COMP/M. 7932), Commission decision of March 27, 2017; and BMS/Celgene (Case COMP/M. 9294), Commission decision of July 29, 2019.

[8]      U.S. FTC Administrative Law Judge, Illumina Inc./GRAIL Inc. Docket No. 9401, Initial Decision of September 9, 2022.

[9]      Ibid.

[10]    Illumina Press Release, “Illumina Intends to Appeal European Commission’s Decision in GRAIL Deal,” September 6, 2022, available here.