How Illumina-ting: The EU Merger Regulation and the brutal operation of power under Article 22 EUMR

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In Joseph Heller’s seminal World War II novel, the protagonist Captain Yossarian finds himself in an inescapable situation.

To continue flying into war is insane, but claiming insanity to avoid going to war immediately demonstrates your sanity. There is no way out. This is Catch-22.

But the book also has other fascinating passages, touching on the nature of logic, and the operation of rules.

In one, Yossarian meets an elderly woman. She tells him “Catch-22 says they have a right to do anything we can’t stop them from doing“.

“What the hell are you talking about?” Yossarian shouted at her in bewildered, furious protest…

“The soldiers with the hard white hats and clubs. The girls were crying. ‘Did we do anything wrong?’ they said. The men said no and pushed them away out the door with the ends of their clubs. ‘Then why are you chasing us out?’ the girls said. ‘Catch-22,’ the men said. All they kept saying was ‘Catch-22, Catch-22.’ What does it mean, Catch-22? What is Catch-22?”

“Didn’t they show it to you?” Yossarian demanded, stamping about in anger and distress. “Didn’t you even make them read it?”

“They don’t have to show us Catch-22,” the old woman answered. “The law says they don’t have to“.

“What law says they don’t have to?”


Some critics have explained how Heller’s work draws out neatly the brutal operation of power.

Re-reading that passage, I could not help thinking that the fate of the girls must feel sadly familiar to Illumina and Grail, two companies now subject to an unexpected Article 22 EUMR referral, in a case that triggered no merger control filings in Europe. Today (20 April 2021), the European Commission accepted the referral request.

This development comes hot on the heels of the European Commission’s new policy on Article 22 EUMR, with the adoption of new guidance on 26 March 2021 (the Guidance).[1]

The policy marks an important extension of the EUMR’s jurisdiction and the European Commission’s power. The debate on European transaction value thresholds is now a moot point.

It is now very clear that the European Commission will now accept (and actively encourage) referral requests from Member States even if a transaction falls below the national merger thresholds – even if the deal has closed. So, the European Commission can pull in for merger review a transaction that has no merger filing requirements in Europe.

The Guidance took immediate effect – and today the European Commission saw the fruit of its new weapon in the case against Illumina’s USD 7 billion bid for Grail in the cancer testing space.

In fact, MLex[2] reported that the European Commission wrote to the national competition authorities on 19 February 2021 to request they trigger the Article 22 EUMR procedure. On 9 March 2021, the French Competition Authority did so (and the Norwegians have subsequently agreed under the EEA Agreement).

This suggests the Guidance was not public at the point the policy change was implemented.

Attempts by Illumina before the French and Dutch courts failed to stop the referral, cementing the awesome power of the European Commission to pull in deals.

It is a significant development. And it came without any form of public consultation. And it is one that has caused some concern to the M&A community, raising real questions on the legality of the policy, on legal certainty, on timing and due process aspects.