Communication from the Commission concerning the withdrawal of act 2021/C 113/01
Date: 2024-12-02
Institutions: Directorate-General for Competition, European Commission
Subjects: administrative cooperation, competition, economic concentration, genetics, health care, merger control, pharmaceutical industry








C_202407190EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/7190


2.12.2024







            COMMUNICATION FROM THE COMMISSION
         
concerning the withdrawal of act 2021/C 113/01
(C/2024/7190)


(1)   

The purpose of this document is to withdraw an earlier Communication from the Commission, notably the Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases (1), in light of the judgment of the Court of Justice of the European Union in Joined Cases C-611/22 P and C-625/22 P.


1.   Introduction – Background to the revised approach towards Article 22 and the Illumina/GRAIL case (2)









(2)


On 26 March 2021, a Staff Working Document (3) presented the results of an evaluation of procedural and jurisdictional aspects of the Merger Regulation which inter alia examined the effectiveness of the turnover-based jurisdictional thresholds of the Merger Regulation. This Staff Working Document sets out the evaluation’s conclusion that while those thresholds, complemented by the referral mechanisms set out in the Merger Regulation, have generally been effective in capturing transactions with a significant negative impact on competition in the internal market, a number of transactions which could potentially also have such an impact have escaped review by both the Commission and the Member States.












(3)


Having identified the referral mechanisms provided for in the Merger Regulation as a possible lever to remedy, at least partially, the issue, the Commission developed a revised approach in respect of the application of Article 22 of the Merger Regulation. In accordance with that revised approach, the Commission intended to encourage and accept referrals in certain cases where the referring Member State did not have initial jurisdiction over the case but the criteria of Article 22 were met.












(4)


On 31 March 2021, the Commission adopted a Communication (‘Guidance’) (4) providing indications about the particular categories of cases that could constitute suitable candidates for a referral in situations where the transaction is not notifiable in accordance with the laws of the referring Member State or Member States, and therefore, effectively, about the criteria that the Commission could take into account in such situations when encouraging or accepting a referral, thus aiming at clarifying the revised approach (5).












(5)


In accordance with the Guidance, on 19 April 2021, the Commission accepted a referral request from France, joined by Belgium, Greece, Iceland, the Netherlands and Norway (‘Referring Countries’) to assess the proposed acquisition of GRAIL by Illumina (‘Transaction’) under the Merger Regulation (‘Referral Decisions’) (6). The Transaction did not meet the turnover thresholds of the Merger Regulation, and was not notified in any Member State, but the Commission considered it to meet the criteria for referral under Article 22 of the Merger Regulation and to be a suitable case within the meaning of the Guidance. In particular, the Commission found that the Transaction would affect trade within the internal market and threatened to significantly affect competition within the territory of the Referring Countries, and that a referral was appropriate because GRAIL’s competitive significance was not reflected in its turnover (7).




2.   Proceedings before the Union Courts









(6)


On 28 April 2021, Illumina sought the annulment of the Referral Decisions before the General Court of the European Union.












(7)


On 13 July 2022, the General Court upheld the Referral Decisions, confirming the Commission’s jurisdiction to examine the Transaction (8).












(8)


On 22 September 2022, Illumina lodged an appeal against the judgment delivered by the General Court. On 30 September 2022, GRAIL also lodged an appeal against the judgment delivered by the General Court.












(9)


On 3 September 2024, the Court of Justice of the European Union upheld the appeals, concluding that Article 22 of the Merger Regulation does not authorise the Commission to accept referrals of concentrations from Member States that have established a national regime of control of concentrations and are not competent to examine those concentrations under their own national law (9). Accordingly, the Court of Justice of the European Union set aside the judgment of the General Court in Case T-227/21 and annulled the Referral Decisions.




3.   Conclusion









(10)


In light of the judgment of the Court of Justice of the European Union in Joined Cases C-611/22 P and C-625/22 P that sets aside the judgment of the General Court in Case T-227/21 and annuls the Referral Decisions, the Commission cannot rely on Article 22 of the Merger Regulation to accept referrals of concentrations from Member States that have established a national regime of control of concentrations and are not competent to examine those concentrations under their own national law.












(11)


Consequently, the Guidance clarifying the revised approach is at least partially devoid of its purpose, and it is therefore appropriate for the Commission to withdraw that Guidance in accordance with the principle of good administration.






(1)  Communication from the Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases, C (2021) 1959 (OJ C 113, 31.3.2021, p. 1).

(2)  Case M.10188 – Illumina / GRAIL.


(3)  See Commission Staff Working Document, Evaluation of procedural and jurisdictional aspects of EU merger control, 26 March 2021, (SWD(2021) 66 final).

(4)  Communication from the Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases, C (2021) 1959 (OJ C 113, 31.3.2021, p. 1).

(5)  In addition, in December 2022, the Commission published on its website a Frequently Asked Questions and Answers document titled ‘Practical information on implementation of the Guidance’ aimed at complementing the Guidance, and providing to merging parties and third parties practical information with respect to the application of Article 22 of the Merger Regulation. Following the developments described in this communication, this document is removed from the website.

(6)  Case M.10188 – Illumina / GRAIL, Commission decisions of 19.4.2021 pursuant to Article 22(1) of Council Regulation No 139/2004 and Article 57 of the Agreement on the European Economic Area, C(2021) 2847 final, addressed to France; C(2021) 2849 final, addressed to Belgium; C(2021) 2848 final, addressed to Greece; C(2021) 2854 final, addressed to Iceland; C(2021) 2855 final, addressed to the Netherlands; C(2021) 2851 final, addressed to Norway, and correcting decision of 20.4.2021, C(2021) 2894 final, addressed to Iceland.

(7)  The case led to the adoption of a number of Commission decisions, namely (i) a decision adopted on 22 July 2021 opening a phase II investigation into the proposed acquisition of GRAIL by Illumina (Case M.10188), (ii) a decision adopted on 6 September 2022 prohibiting the acquisition of GRAIL by Illumina (Case M.10188), (iii) two decisions concerning interim measures adopted on 29 October 2021 Case (M.10493) and on 28 October 2022 (Case M.10938), (iv) a decision adopted on 12 October 2023 ordering restorative measures requiring Illumina to unwind its acquisition of GRAIL (Case M.10939), and (v) a decision adopted on 12 July 2023 fining Illumina and GRAIL for implementing their merger before approval by the Commission (Case M.10483). These decisions have been withdrawn.

(8)  Case T-227/21, Illumina v Commission, ECLI:EU:T:2022:447.

(9)  Joined Cases C-611/22 P and C-625/22 P, Illumina and Grail v Commission, ECLI:EU:C:2024:677.


ELI: http://data.europa.eu/eli/C/2024/7190/oj
ISSN 1977-091X (electronic edition)