Opinion of Advocate General Emiliou delivered on 21 March 2024.

• Jurisdiction: European Union
• Celex Number: 62022CC0611
• ECLI: ECLI:EU:C:2024:264
• Date: 21 March 2024
• Court: Court of Justice (European Union)

OPINION OF ADVOCATE GENERAL

EMILIOU

delivered on 21 March 2024 (1)

Joined Cases C‑611/22 P and C‑625/22 P

Illumina, Inc.

v

European Commission (C‑611/22 P)

and

Grail LLC

v

Illumina, Inc.,

European Commission (C‑625/22 P)

(Appeal – Competition – Concentrations between undertakings – Article 22 of Regulation (EC) No 139/2004 – Concentrations that do not have a Community dimension – Referral request from a competition authority not having jurisdiction under national law – Commission decision to examine the concentration – Competence of the Commission – Time limit for submitting the referral request – Obligation to act within a reasonable time – Principle of good administration – Right of defence – Legitimate expectations)

I. Introduction

1. Most modern anti-trust laws, both within the European Union and elsewhere, are built on a trifecta of provisions: rules on agreements and concerned practices, rules on unilateral conduct (or abuses of dominance), and rules on merger control.

2. The peculiarity of rules of merger control lies in the fact that, unlike the other two sets of rules, they generally require the competent (administrative and/or judicial) authorities to engage in an ex ante, as opposed to an ex post, form of review: whether a proposed concentration could, if implemented, result in significant harm to effective competition. It is a particularly complex and laborious technical evaluation, ‘based not on the application of precise scientific rules but on criteria and principles which are open to question’, aimed at ‘predicting the effects of the concentration on the structure and competitive dynamics of the markets concerned, taking into consideration the many constantly evolving factors which may impinge on the future development of supply and demand on those markets’. (2)

3. Nevertheless, that assessment must be done in the shortest possible timeframe. Indeed, in order to preserve the effectiveness of the system, most legal regimes – including that of the European Union – require the undertakings concerned to notify the transaction to the competent authorities and to suspend its implementation until they receive clearance from those authorities. Notification and suspension entail significant costs and engender some risks for the undertakings involved.

4. Against that backdrop, the legislature’s choice of the type of thresholds and the setting of the relative amounts which, when met, trigger the notification and suspension obligations for the merging parties is of crucial importance for the proper functioning of the system. Those thresholds pursue a dual function: to ensure a ‘local nexus’ which justifies the intervention of the authorities in question, and to filter the transactions which are potentially of interest. Ideally, thresholds should be easy to calculate (to avoid uncertainties as to whether a given transaction has to be notified) and set at a level that minimises, at the same time, the number of transactions unlikely to raise competitive concerns that are caught by the system, and those that are capable of raising such concerns that fall outside it. (3)

5. The EU system of merger control – governed by Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the [EU] Merger Regulation) (‘the EUMR’) – (4) is primarily based on the turnover of the merging companies. However, there are some provisions in that regulation that, by way of exception, empower the European Commission to review mergers not meeting the turnover thresholds in question, when cases are referred to that institution by the Member States’ authorities and, as the case may be, after being invited to do so by the Commission. The present case turns mainly on defining the meaning and scope of one of those provisions: Article 22 EUMR. In a nutshell, the key issue in the present proceedings is the following: does that provision enable the Commission to review a merger referred to it by a Member State’s authorities, where the latter lack any competence to review it, since the merger in question falls below the thresholds set out in their national legislation on merger control?

6. Despite the apparent simplicity of the question, finding the correct answer is by no means a straightforward exercise. It requires from the interpreter a meticulous hermeneutic analysis to determine the proper construction of Article 22 EUMR. To do so, it is necessary not only to examine the wording, origin, context and purpose of that provision, but also to take into account the logic of the EU system of merger control as well as some fundamental principles of EU law (such as institutional balance, subsidiarity, legal certainty, territoriality, etc.). Last but not least, it is hard to overemphasise the importance that the answer to that question may have on the correct and effective function of the EU system of merger control.

II. European Union law

7. Article 22 EUMR, entitled ‘Referral to the Commission’, provides:

‘1. One or more Member States may request the Commission to examine any concentration as defined in Article 3 that does not have a Community dimension within the meaning of Article 1 but affects trade between Member States and threatens to significantly affect competition within the territory of the Member State or States making the request.

Such a request shall be made at most within 15 working days of the date on which the concentration was notified, or if no notification is required, otherwise made known to the Member State concerned.

2. The Commission shall inform the competent authorities of the Member States and the undertakings concerned of any request received pursuant to paragraph 1 without delay.

Any other Member State shall have the right to join the initial request within a period of 15 working days of being informed by the Commission of the initial request.

…

3. The Commission may, at the latest 10 working days after the expiry of the period set in paragraph 2, decide to examine, the concentration where it considers that it affects trade between Member States and threatens to significantly affect competition within the territory of the Member State or States making the request. If the Commission does not take a decision within this period, it shall be deemed to have adopted a decision to examine the concentration in accordance with the request.

The Commission shall inform all Member States and the undertakings concerned of its decision. It may request the submission of a notification pursuant to Article 4.

The Member State or States having made the request shall no longer apply their national legislation on competition to the concentration.

4. Article 2, Article 4(2) to (3), Articles 5, 6, and 8 to 21 shall apply where the Commission examines a concentration pursuant to paragraph 3. Article 7 shall apply to the extent that the concentration has not been implemented on the date on which the Commission informs the undertakings concerned that a request has been made.

Where a notification pursuant to Article 4 is not required, the period set in Article 10(1) within which proceedings may be initiated shall begin on the working day following that on which the Commission informs the undertakings concerned that it has decided to examine the concentration pursuant to paragraph 3.

5. The Commission may inform one or several Member States that it considers a concentration fulfils the criteria in paragraph 1. In such cases, the Commission may invite that Member State or those Member States to make a request pursuant to paragraph 1.’

8. The referral mechanism now set out in Article 22 EUMR was originally established in Article 22(3) to (6) (‘Application of this Regulation’) of the 1989 EC Merger Regulation (5) (‘the ECMR’) which was then amended by Council Regulation (EC) No 1310/97. (6) The ECMR was then repealed by the EUMR with effect from 1 May 2004.

III. Factual background

9. The most relevant facts, as set out in the judgment in Case T-227/21, Illumina v Commission (‘the judgment under appeal’),(7) can be summarised as follows.

10. On 20 September 2020, Illumina Inc. – a US-based company marketing sequencing- and array-based solutions for genetic and genomic analysis – entered into an agreement and plan of merger to acquire sole control of Grail LLC (formerly Grail, Inc.), which develops blood tests for the early detection of cancer, in which it already held a 14.5% stake (‘the concentration at issue’). On 21 September 2020, Illumina and Grail (‘the appellants’) issued a press release announcing that concentration.

11. Since the turnover of the appellants did not exceed the relevant thresholds, in particular given the fact that Grail did not generate any revenue in any EU Member State or elsewhere in the world, the concentration at issue did not have a European dimension for the purpose of Article 1 EUMR and was not therefore notified to the Commission. Nor was the concentration at issue notified in the EU Member States or in States party to the Agreement on the European Economic Area, (8) since it did not fall within the scope of their national merger control rules.

12. After receiving a complaint relating to the concentration at issue in December 2020, the Commission had some exchanges with the complainant, with a number of Member States’ national competition authorities (‘NCAs’) and with the United Kingdom’s Competition and Markets Authority.

13. On 19 February 2021, the Commission informed the Member States of the concentration at issue by sending them a letter in accordance with Article 22(5) EUMR (‘the invitation letter’). In that letter, the Commission explained the reasons why it found, prima facie, that the concentration appeared to satisfy the conditions laid down in Article 22(1) EUMR, and invited the Member States to submit a referral request.

14. In the course of a telephone conversation on 4 March 2021, the Commission...