Washington, D.C. — The American Economic Liberties Project today filed an amicus brief asking the Fifth Circuit to uphold the Federal Trade Commission’s (FTC) order requiring Illumina to divest its majority ownership of cancer diagnostic test maker GRAIL. Economic Liberties’ brief argues that Illumina-GRAIL’s criticism of the product market definition — the research and development of multi-cancer early detection tests — is wholly inconsistent with the purpose of Section 7 of the Clayton Act and ignores decades of enforcement efforts and court decisions recognizing the importance of protecting innovation.

“Let’s be clear: the FTC correctly ordered Illumina to divest GRAIL in order to protect future competition in the cancer test market,” said Katherine Van Dyck, Senior Counsel at the American Economic Liberties Project. “The product market definition in this case — as approved by the full Commission and administrative law judge — correctly identifies the importance of considering the potential future harms of this merger in a nascent and potentially life-saving market. Ignoring how courts and enforcers have interpreted the law for years, Illumina-GRAIL’s appeal against this definition is essentially attempts to rewrite the Clayton Act to ignore the effects of consolidation on innovation, research, and development. Our antitrust laws cannot protect competition if merger challenges supported by clear evidence of foreclosures are rejected based on convoluted, burdensome, and unrealistic requirements for market definition that ignore the effects of acquisitions on future market conditions.”

The FTC challenged Illumina’s proposed acquisition of GRAIL in September 2022, alleging that the acquisition would “diminish innovation in the U.S. market for MCED tests while increasing prices and decreasing choice and quality of tests.” That same month, the European Commission also prohibited the acquisition after a lengthy investigation process. Both the FTC and EU concluded that the remedies Illumina and GRAIL proposed were insufficient and did not address the core harms of the deal.

Economic Liberties argues that Illumina-GRAIL’s criticism of the product market definition in Section 7 of the Clayton Act — namely their claim that it is “unprecedently broad and speculative” — is inconsistent with not only the law’s original purpose, but also decades of precedent. Even Illumina’s own counsel, Christine Varney, argued as a Commissioner at the FTC that “it is the Commission’s statutory responsibility to consider the possibility, or likelihood, of future anticompetitive effects.” “Innovation market analysis,” she added “does not require any radical departure from the traditional tools used in antitrust analysis,” also noting that protecting innovation specifically involves “R&D directed to particular new or improved goods or processes.”

The entire point of our antitrust laws is to protect future market conditions. Mergers can be challenged under the Clayton Act based on the acquiring firm’s potential future entry into the relevant market, and restraints of trade and monopolies can be challenged under the Sherman Act based on a nascent competitor’s potential future entry into the relevant market. And the FTC’s order in Illumina-Grail properly protects research and development of future cancer screening products. This type of market was approved by Robert Bork, during his tenure as a D.C. Circuit judge, in United States v. PPG Industries, and the Fifth Circuit should uphold it in this case as well.

Read the full amicus brief here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.