U.S. Antitrust Gets a European Makeover

The FTC outsources its investigation of Illumina to Brussels bureaucrats.

By Joshua D. Wright. Mr. Wright is executive director of the Global Antitrust Institute at Scalia Law School. He was a Republican FTC commissioner, 2013-15.

"The Federal Trade Commission finished hearing testimony last week in its administrative proceeding aimed at forcing a genomics-sequencing company, Illumina, to reverse its recent acquisition of a startup whose blood test can detect many early-stage cancers.

Ordinarily, this is an acquisition the FTC would approve. The decision to challenge Illumina indicates a radically different approach to antitrust that will prove suffocating.

The established antitrust approach—economic analysis above all, with consumer welfare as its lodestar, a central role for judicial review and the rule of law, and embracing innovation and dynamic competition—has paid astonishing dividends. The world’s most successful companies are in the U.S. because the world’s best competition law is here. But that is soon to be a thing of the past.

The traditional American approach is being replaced with one uniformly more bureaucratic, eschewing courts and economic evidence in favor of political judgments. These changes—encouraged by both populists on the right and postmodernists on the left—will make American antitrust more European. 

The Illumina case is the most striking example of the Europeanization of U.S. antitrust. In September 2020, it proposed to reacquire Grail, a company it formed in 2015 and spun off in 2017. American antitrust law has traditionally understood that acquisitions involving companies in the same supply chain (Grail uses Illumina’s devices) tend to unlock significant pro-consumer efficiencies. Here, a company could get help rolling out its breakthrough blood test years ahead of schedule.

In the past, the FTC likely would have approved this for several reasons. For one, the market for early-detection multiple-cancer biopsies is nonexistent, as are Grail’s revenues. Grail’s test is a highly differentiated product; other screening tests reportedly in development are more likely to be complements and not substitutes. And Illumina would be able to accelerate Grail’s availability by years, potentially saving more lives. But the FTC’s challenge rejects this bird in the hand in deference to the threat of price discrimination that won’t exist for several years—if at all. When hypotheticals stand between you and your theory of harm, you don’t have a theory of harm—just speculation.

The FTC’s complaint against the Illumina-Grail deal also was at odds with the new Vertical Merger Guidelines it crafted with the Justice Department and then withdrew this month without opportunity for public comment. But here is the Continental twist: The FTC dropped its original federal court case questioning the Grail acquisition and said it would instead defer to the European Union. According to the FTC statement, now that “the European Commission is investigating, Illumina and Grail cannot implement the transaction without obtaining clearance from the European Commission.” But implement the transaction is exactly what Illumina and Grail did.

It was a bold countermove to the FTC’s attempt to prohibit the merger via procedural shenanigans. As Tad Lipsky, a former FTC Bureau of Competition director, recently observed: “The notion of allowing sequential merger reviews by different jurisdictions, as in this case, would lead to massive delays for transactions subject to review in multiple jurisdictions.”

Since when does the American government outsource governing to Europe? Bad enough when the FTC avoids federal court in favor of its own administrative process; it is far worse for it to pull cases from federal court and hand them off to European bureaucrats.

In addition to outsourcing to the sclerotic bureaucracies of Europe, we are about to import that bureaucracy to American soil. Having seen the U.K. and Australia implement tech-specific regulators, some in Congress want to join in with an American spinoff. Whatever the problems with “big tech,” adding another regulator won’t fix them.

Even without action from Congress, Lina Khan, chair of the FTC, is sketching out her own central plan for the economy. Those with power in the government may hope these changes will be deployed for the greater good. And they might, on occasion, accomplish that. But more likely will be a mere shifting of power from judges to European-style bureaucrats.

This country’s success should not be jeopardized to punish political enemies. The direction of our antitrust institutions, and the well-being they facilitate, are too important to punt to Europe for leadership. No good will come from turning Washington into New Brussels."