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The European Union has imposed a record fine on Illumina after the world’s largest gene-sequencing company completed an $8 billion takeover without Brussels’ consent, in violation of what regulators called the “cornerstone” of their authority.
On Wednesday, the European Commission imposed a fine of 432 million euros, equivalent to 10 percent of Illumina’s revenue and the largest fine it can impose for this type of breach.
New York-listed Illumina and Brussels have been embroiled in a legal battle since 2021 when the US company proceeded to buy cancer test developer Grail even as EU regulators weighed whether the deal would hurt competition.
EU regulators decided to block the deal a year later, saying it would stifle innovation and limit choice for consumers. Illumina disputed the EU’s right to scrutinize the deal, citing the fact that Grail had no revenue in Europe.
In announcing the fine, the European Commission said that “EU merger rules require that merging companies not carry out mergers until they have been approved by the Commission.”
“It is the cornerstone of the European integration control system that enables the Commission to do its part before structural changes to adjust the competitive landscape,” she added.
The decision to impose the maximum penalty indicates the authorities’ desire to deter other companies from following Illumina’s example. Illumina’s punishment dwarfs the previous largest penalty for a similar breach, when telecoms group Altice received 125 million euros, the equivalent of 1 percent of its revenue.
Illumina said it would appeal the fine. “We believe the fine . . . is unlawful, inappropriate and disproportionate,” the company said.
The San Diego-based company’s decision to complete the acquisition unleashed a challenge from Carl Icahn. The American activist investor called the deal reckless and pushed for the departure of longtime Illumina CEO Francis de Souza, who agreed in June to step down.
Grail said his goal is to create a cancer screening test for asymptomatic people. Illumina has accused Brussels of putting lives at risk by blocking a deal aimed at bringing a blood test to market that screens for dozens of different types of cancer.