US Appeals Court Strikes Down FTC Order Against Illumina’s Purchase of Grail
US Appeals Court Ruling
A U.S. appeals court made a significant decision on Friday, overturning a Federal Trade Commission order against Illumina’s acquisition of Grail, a cancer diagnostic test maker. The court declared that the FTC had utilized an incorrect legal standard in its decision.
The 5th U.S. Circuit Court of Appeals in New Orleans issued a 34-page order requiring the FTC to reassess the deal. The court acknowledged the FTC’s evidence indicating that the acquisition could diminish competition in the sector of cancer detection blood tests.
FTC’s Response
A spokesperson for the FTC hailed the court’s opinion as an essential triumph for antitrust enforcement. They emphasized that this ruling recognizes the threat posed by vertical mergers to healthy competition in the market.
However, the court also noted that the FTC had failed to adequately consider Illumina’s commitment to continue supplying DNA sequencing services to other companies. As a part of this commitment, Illumina pledged not to raise prices and to sign contracts with any of Grail’s competitors.
Company’s Reaction
After the ruling, Illumina stated that they are currently reviewing the decision. The company had previously argued that the FTC had exceeded its constitutional powers but was denied by the court.
Background and Implications
Grail, valued at $7.1 billion under Illumina’s acquisition, is developing a powerful blood test capable of diagnosing various types of cancer. The FTC expressed concerns about Illumina potentially monopolizing the market and affecting prices or access to its competitors.
Notably, Illumina completed the acquisition of Grail in mid-2021, despite ongoing confrontations with the FTC in the U.S. and the European competition enforcer.
European Involvement and Conclusion
Europe has also suggested measures for Illumina to undo its acquisition of Grail, but the company has contested the EU’s jurisdiction, arguing that it does not conduct business in Europe. The legal battle between Illumina and regulatory bodies continues, raising questions about the future of the acquisition and the competitive landscape in the realm of cancer diagnostics.
