Illumina v. FTC, 88 F.4th 1036

Illumina, a dominant supplier of next-generation sequencing (NGS) platforms, originally spun off Grail, its subsidiary focused on developing a multi-cancer early detection (MCED) test, but reacquired it in 2020 for $8 billion.
Grail’s Galleri test, the first NGS-based MCED test to market, and all rival MCED tests under development must use Illumina’s NGS platforms—there are no viable alternatives.
The Federal Trade Commission (FTC) challenged the merger under Section 7 of the Clayton Act, arguing it threatened competition in the research, development, and commercialization of MCED tests.
An Administrative Law Judge found for Illumina, holding the merger was unlikely to harm competition, especially given Illumina's “Open Offer” supply contract made to rival MCED developers.
The FTC Commission reversed, ordering divestiture of Grail and deeming the Open Offer inadequate to offset competitive harm; Illumina appealed.
The Fifth Circuit reviewed the FTC’s order, focusing on both the merits of the antitrust challenge and the legal standards applied to merger remedies like the Open Offer.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Constitutionality of FTC Proceedings	FTC’s structure and procedures violate separation of powers, due process, and equal protection	FTC’s structure and process are longstanding and constitutional	Constitutional challenges foreclosed by Supreme Court precedent
Relevant Market Definition	Market is only for currently available MCED products	Market includes research, development, and commercialization of MCED tests, even those in development	Agrees with FTC: product market includes R&D and commercialization of MCED tests
Assessment of Competitive Harm	There is no likely foreclosure because no rivals exist yet; Open Offer prevents future foreclosure	Merger would give Illumina ability and incentive to foreclose future competitors; Open Offer does not fully address this	Substantial evidence supports FTC’s finding that merger could substantially lessen competition
Proper Standard for Evaluating the Open Offer	Open Offer should be part of government’s prima facie case; standard should be total negation of harm	Open Offer should be considered as rebuttal evidence; only required to mitigate anticompetitive harm, not negate it entirely	Correct standard is whether Open Offer mitigates harm enough so merger is not likely to substantially lessen competition; remanded for reassessment

Chicago Bridge & Iron Co. N.V. v. FTC, 534 F.3d 410 (5th Cir. 2008) (clarifying standards of review for FTC merger decisions and burden-shifting in Section 7 cases)
United States v. Marine Bancorporation, Inc., 418 U.S. 602 (1974) (necessity of defining the relevant market in merger analysis)
Brown Shoe Co. v. United States, 370 U.S. 294 (1962) (articulating factors for product market definition in antitrust law)
United States v. Phila. Nat’l Bank, 374 U.S. 321 (1963) (early articulation of Section 7’s preventive purpose and standard for evaluating likely harms)
Ford Motor Co. v. United States, 405 U.S. 562 (1972) (relief in antitrust cases must restore competition)
United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990) (standard for rebuttal of antitrust prima facie case in merger context)
Anthem, Inc. v. United States, 855 F.3d 345 (D.C. Cir. 2017) (discussion of efficiency defenses and market definition in merger cases)