More tech mergers set for EU review after court endorses Commission’s almost unlimited jurisdiction

On Wednesday, the General Court of the European Union handed down an important decision that endorses the European Commission’s effectively unlimited jurisdiction to review mergers. We expect the Court’s stamp of approval to further embolden the Commission to review mergers in the tech and other innovation heavy industries, even where they do not meet the merger control thresholds at EU or Member State level.

In its much-anticipated judgment in the Illumina/Grail case, the General Court has upheld the EU’s interpretation of its power to accept referrals of mergers from Member States.

Historically, the Commission’s practice was to accept referrals from Member States only where the Member State making the referral had jurisdiction to review the merger under its own national merger thresholds. Commissioner Vestager announced plans to change this in September 2020, and guidance was issued in early 2021 (as we wrote about in TechInsights at the time). 

Under the new approach, acquisitions falling below the notification thresholds of national competition authorities in Europe can also be referred to and reviewed by the Commission (see a fuller summary of the guidance from our merger control team).

The Commission used this power for the first time to seek to review the Illumina / Grail deal and Illumina challenged this in court. The General Court’s decision upheld the Commission’s approach.

This will doubtless not be the end of the saga and Illumina has already said it will appeal further to the European Court of Justice. Unless and until the ECJ overrules the General Court however, virtually all mergers with an EU nexus, whatever the turnover and/or market shares of the parties, could be subject to review by a referral to the Commission. 

Given the Commission’s stated intention to use this power to review tech deals previously under their radar, the possibility of a Commission review should be front of mind – alongside the CMA of course – for all tech deals.