Parties, which are of the opinion that their interests are affected by a merger, have the opportunity to intervene in a case in order to pursue their interests – also during EU court proceedings. Most recently, this played a role in Illumina/Grail (we’ve reported on that case several times, see inter alia here). In this post, I take a look at the developments in this case, but also explain how interventionism works before EU courts (so there is really something to learn this time).
Intervention in Illumina/Grail – Part 1
Illumina’s plans to acquire Grail is a merger that has attracted interest not only in the antitrust world, but apparently also affected a number of businesses and companies, which is already shown by the number of motions to intervene in the proceedings. To recap, there are currently two court proceedings in the matter: an appeal before the ECJ, in which the European Commission’s jurisdiction following Art. 22 referrals is at stake, and a trial before the General Court, in which the prohibition decision itself is under appeal (and there will be most likely another case, if Illumina appeals the gun jumping fine of EUR 432 million imposed by the European Commission in July 2023, see our recent post here).
With regard to the ECJ proceeding concerning Illumina’s appeal against the jurisdiction of the European Commission pursuant to an Art. 22 referral, the ECJ in March 2023 allowed an intervention of Biocom, a US association of life sciences sector companies. The ECJ’s decision was based on the premise that Biocom’s members, mainly life science companies from outside the EU, could be significantly affected by Art. 22 referrals. This is because pharma is among those sectors for which the European Commission encourages and accepts referrals from Member States. Moreover, many of Biocom’s members are startups with limited turnover in the European Union and its Member States.
Intervention in Illumina/Grail – Part 2
In the General Court proceedings, where Illumina sought to annul the European Commission’s prohibition decision, Biocom also tried to intervene in support of Illumina. Less surprisingly, Illumina had no objections to the intervention, while the European Commission rejected it. In this case, the General Court refused Biocom’s application, stating that Biocom had failed “to demonstrate, on the basis of concrete and specific evidence, that the forthcoming judgment in the present case will affect the conditions under which its members operate in the market concerned by the concentration at issue and their strategies for finding investors”. While the General Court referred to the March decision of the ECJ, it found that this case was different because the application of Art. 22 played no role in this case, which was limited to the assessment of the concentration of two specific undertakings, namely Illumina and Grail, which would not directly affect members of Biocom. On 11 August 2023, Biocom lodged an appeal against the decision of the General Court, asking the ECJ to overturn the General Court’s refusal.
How does intervention work at EU courts?
According to Article 40 of the Statute of the ECJ, also applicable to the procedure before the General Court, any person establishing an interest in the result of a case submitted to the General Court or ECJ, to the exclusion of cases between Member States, between EU institutions or between Member States, on the one hand, and institutions of the European Union, on the other, is entitled to intervene in that case. So again, the key question is what constitutes an “interest in the result of the case”. According to the case law the concept of “interest in the result of the case”, “must be defined with regard to the subject matter of the case and be understood as being a direct and existing interest in the ruling on the forms of order sought, and not as an interest in relation to the pleas in law or the arguments raised”.
In essence, this means that the applicant must be directly affected by the measure subject to the decision. An exception is made for trade associations, which can also intervene on behalf of their members in case the interests of their members are affected. This was the case in the intervention decision by the ECJ in Illumina/Grail (Part 1 above), where the ECJ found that Biocom had more than 1365 members active in the pharmaceutical and medical device sector, including 155 companies specialising in genomics and diagnostics and many undertakings involved in blood-based cancer screening tests using next-generation genomic sequencing.
Now what about the promised learning effect?
Firstly, both decisions as well as the established case law show that interventions by third parties are carefully examined by the EU courts. This applies both to interventions by individual companies and by trade associations. Secondly, it will be very interesting to see if the ECJ will allow Biocom to intervene in the proceedings regarding the annulment of the prohibition decision before the General Court. If not, one should carefully examine why the ECJ granted the intervention in the first case but denied in in the second case. At first glance – based on the established case law – a different treatment is not necessarily obvious. Thirdly, as a more general rule, intervention should not be taken lightly by those involved. The merging parties should therefore monitor for any third-party interventions and make sure they respond accordingly (this may also include preparation for such interventions in the run-up to the transaction).
Photo by Max Bender on Unsplash
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