Illumina hit with record €432mn fine for ignoring EU concerns over Grail deal
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The EU has hit Illumina with a record fine after the world’s largest gene sequencing company completed an $8bn acquisition without the approval of Brussels, violating what regulators said was the “cornerstone” of their authority.
The European Commission on Wednesday imposed a €432mn penalty, equal to 10 per cent of Illumina’s revenue and the largest it can levy for this sort of infringement.
New York-listed Illumina and Brussels have been locked in a legal fight since 2021 when the US company proceeded with the purchase of cancer test developer Grail even as EU regulators were examining whether the deal would hurt competition.
EU regulators decided to block the transaction a year later, saying it would stifle innovation and limit choice for consumers. Illumina had disputed the EU’s right to scrutinise the deal, pointing to the fact that Grail does not have any revenues in Europe.
Announcing the fine, the European Commission said that “EU merger rules require that merging companies not to implement mergers until approved by the commission”.
It added: “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.”
The decision to impose the maximum penalty signals a desire by authorities to deter other companies from following Illumina’s example. Illumina’s punishment dwarfs the previous largest penalty for a similar infringement, when telecoms group Altice was hit with a €125mn fine, equivalent to 1 per cent of its revenues.
Illumina said it would appeal against the fine. “We believe that the fine . . . is unlawful, inappropriate and disproportionate,” the company said.
The San Diego-based company’s decision to complete the acquisition unleashed a challenge from Carl Icahn. The US activist investor branded the deal as reckless and pushed for the departure of Illumina’s longstanding chief executive Francis deSouza, who in June agreed to step down.
Grail has said its aim is to create a cancer screening test for people without symptoms. Illumina has accused Brussels of putting lives at risk by blocking a deal that aims to bring to market a blood test to screen dozens of different cancers.
Source: Financial Times
