Illumina, the US genetic testing company has been fined by the European Union for a record 432 million euros (USD 476 million) on Wednesday (July 12). The fine has been imposed for closing its takeover of cancer test maker Grail without obtaining EU antitrust approval.
In September 2022, the deal was eventually blocked. Regulators were concerned that Illumina, after acquiring Grail, would have an incentive to cut off Grail’s rivals from accessing its technology to develop blood-based early cancer detection tests to compete with Grail.
By closing the deal prematurely, Illumina was able to exercise a decisive influence over Grail, which it did, the EU enforcer said, calling the move unprecedented and a very serious infringement.
“If companies merge before our clearance, they breach our rules. Illumina and Grail knowingly and deliberately did so by implementing their tie-up as we were still investigating,” EU antitrust chief Margrethe Vestager said in a statement.
For its active role in the infringement, Grail was given a symbolic 1,000 euro fine. This marks the first time a target company has been sanctioned.
‘Unlawful’ fine
Illumina has criticised the fine as “unlawful, inappropriate, and disproportionate”. The company has said that it would appeal the penalty. It has set aside USD 458 million which represents 10 per cent of its consolidated annual revenue in fiscal year 2022.
“We closed the transaction in 2021 because there was no impediment to closing in the U.S. and the deal timeframe would have expired before the EC could reach a decision on the merits,” the company said in a statement.
“The deal timeframe relied on the EC’s public statements that it would not assert jurisdiction over mergers of this type until new guidelines were issued, yet the EC nonetheless asserted jurisdiction over the merger before issuing the promised guidelines.”
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