EU Court Slams Backlash Over “Killer Acquisitions”: Impacts of the Illumina-GRAIL Ruling

The Illumina/Grail litigation has reshaped the EU’s merger control framework. Previously, to address concerns that digital incumbents were acquiring small but potentially threatening firms (“killer acquisitions”), the Commission in 2021 issued guidance interpreting Article 22 EUMR to allow national authorities to refer transactions to it even if they fell below both EU and national notification thresholds. In Illumina/Grail, the target, Grail, had no operations or revenues in the EU yet was to be reacquired by U.S.-based Illumina. The Commission accepted referrals by multiple Member States and in 2022 blocked the deal and fined Illumina €432 million for completing the acquisition prematurely.

On 3 September 2024, the ECJ held that this practice exceeded the Commission’s legal competence: it annulled the General Court’s prior rulings and decisions based on referrals under Article 22 in cases where neither EU nor any Member State thresholds were met. The rationale emphasized legal certainty, predictability, and territorial competence.

This verdict limits enforcement levers for EU regulators: even though DMA Article 14 mandates gatekeepers to notify the Commission of acquisitions regardless of notification thresholds, the Commission can no longer accept referrals from Member States lacking jurisdiction under their national merger laws. A loophole thus remains for acquisitions by gatekeepers when the transaction is not notifiable anywhere—nationally or at EU level.

In response, several Member States have adopted national reforms. Germany and Austria use transaction-value based thresholds, while others (Denmark, Italy, etc.) have “call-in” powers allowing authorities to require notification if competition concerns arise, regardless of turnover thresholds. These national regimes may now be the primary way to monitor high-risk but below-threshold deals.[0news12]

Strategically, companies operating in the digital or biotech sectors must now carefully assess both EU and individual Member State notification thresholds—including new transactional-value criteria and call-in powers—and embed regulatory risk into acquisition planning. For regulators, the ECJ decision underscores the political challenge of updating the legal framework; pursuing legislative amendments to either EUMR or DMA may be necessary to plug gaps if EU wants to reclaim authority over non-notifiable but potentially harmful deals.

Open questions include: what form of legislative change the Commission or Parliament will propose; how to balance legal certainty against regulatory flexibility; and whether antitrust enforcement can keep pace with rapid innovation if harmful acquisitions occur below all thresholds. Also, whether economic effects of small-unreported acquisitions (concentration, innovation suppression) can be empirically demonstrated for policy calibration.