5th Circuit Court Upholds FTC Reassessment of Illumina’s Grail Acquisition

Summary

  • A New Orleans-based panel of the 5th U.S. Circuit Court of Appeals released a 34-page order directing the FTC to reassess the Illumina-Grail deal.
  • The FTC had substantial evidence showing that, this deal might reduce competition in the market for a many cancer detecting blood test.
  • Illumina, despite the FTC’s objections, proceeded with the acquisition of Grail in mid-2021.
  • The verdict has been welcomed by the FTC as a crucial victory for competition enforcement.
  • Illumina has disputed the FTC’s authority and EU’s jurisdiction post-acquisition.

Court Directs FTC to Review Illumina-Grail Deal

The 5th U.S. Circuit Court of Appeals, located in New Orleans, issued a 34-page order obliging the FTC to revisit the merger. The court, constituted of a three-judge panel, pointed out that the FTC had compelling evidence indicating the merger could decrease competition. This is in relation to companies vying to introduce a blood test that can detect various types of cancer.

An FTC representative welcomed the panel’s judgment, describing it as a significant victory for antitrust enforcement. They emphasized the potential risks to competition posed by vertical mergers.

The Panel’s Verdict and Illumina’s Reaction

However, the panel also mentioned that the FTC did not adequately take into account Illumina’s commitment to keep offering its DNA sequencing services to other firms. Illumina had promised to sign contracts to cater to any competitors of Grail without price hikes. “We are reviewing the decision,” commented Illumina post the verdict.

Furthermore, the court dismissed Illumina’s contention that the FTC had exercised its authority unconstitutionally. The court’s decision, as per the FTC spokesperson, represents a crucial juncture for those seeking to safeguard open, competitive markets.

Defending its Rights: Illumina’s Appeal and Its Implications

After finding its due process allegedly denied by the FTC, San Diego-based Illumina had lodged an appeal in June. The FTC has expressed concerns that Illumina, a dominant player in DNA sequencing of tumors aiding in tailoring suitable treatment options, might hike rates or refuse sales to Grail’s rivals.

It’s worth noting that despite squaring off with the FTC and facing similar adversity in Europe, Illumina went ahead with the Grail acquisition in mid-2021. Europe, in response, has suggested steps for Illumina to dismantle the Grail deal. Controversially, Illumina asserts that it does no business in Europe, therefore the EU competition enforcer lacks jurisdiction.

This ruling may have significant implications on forex and trading, potentially influencing assets tied to Illumina or Grail. It poses an interesting dynamic for stakeholders in the global financial marketplace to consider.

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