Europe's highest court affirms 'broad' opportunities for intervention by professional associations

Introduction

Allowing third parties to intervene in front of judges raises several issues of fundamental importance. For example, the need for decision makers to have access to all relevant information, and the efficiency of the justice system. Different factors point in opposing directions, and so it is perhaps not surprising that the right to intervene during a court case is a constantly evolving matter of interest. Recently, the application by a third party to intervene in the appeal against the decision to prohibit the Illumina/Grail merger, which has gone all the way to the Court of Justice of the EU (the "ECJ"), has shed light on interpretation of the right of intervention of professional associations by the European Union's (the "EU") highest court.¹ This ruling merits closer attention, as it seems to open the door for third parties, including trade associations, to have a louder voice in key European litigation going forward, potentially changing the relationship dynamic with upstream and downstream players. This, in turn, leads to possible business opportunities and gives associations a greater chance to influence the markets on which they operate than has perhaps been the case to date. At the same time, businesses dealing with trade associations should take note of how an increase in third party intervention might impact dealings with other players.

Background

Following an in-depth investigation by the European Commission ("Commission"), the acquisition of sole control of Grail by Illumina was prohibited in September 2022.² On 17 November 2022, Illumina brought an action before the General Court seeking an annulment of the Commission decision.³ A few months later, Biocom California ("Biocom") applied for leave to intervene in support of Illumina. Biocom’s application was refused by the General Court on 19 July 2023.⁴

Key findings of the General Court

While the General Court accepted that Biocom may be regarded as a representative professional association which has as its object the protection of its members’ interests, the General Court found that Biocom had not established that it has a direct and existing interest in the ruling of the General Court in this case. In particular according to the General Court: 

• The annulment of the Commission decision could not have any direct effects on the situation of Biocom’s members other than Illumina and Grail, the undertakings directly concerned by the decision, as the decision prohibits a concentration between these two specific undertakings;
• On the argument related to the principle of territoriality, i.e. the scope of the Commission’s competence to assess concentrations involving parties with no turnover in the EU, “Biocom has failed to demonstrate that the interpretation of the principle of territoriality is more likely to affect its members than other undertakings operating in different sectors and that the interests of its members may be affected significantly by the forthcoming judgment”;⁵
• In terms of challenging the Commission's findings on efficiencies which the proposed merger would give rise to and the applicable legal standard, Biocom has failed to establish that the answer to that point in the forthcoming judgment is capable of having a particular impact on the way in which certain concentrations in the life sciences sector are likely to be handled; and
• The other arguments put forward by Biocom to demonstrate that the interests of its members are directly affected by the decision were based on general and insufficiently substantiated considerations.

This Order of the General Court was handed down by the Fifth Chamber in extended composition. Interestingly, it was followed a few days later by other Orders (see here and here) of the Chamber also in extended composition, similarly refusing other third parties’ applications to intervene in the same case.

The recourse to an extended Chamber, combined with the consecutive character of the Orders refusing these kinds of interventions, signalled the significance of those decisions. These also marked a shift in the General Court’s case law with regards to admissibility of third-party interventions, particularly in relation to trade associations. Indeed, there are reasons to believe that by delivering these orders through an extended Chamber, the General Court aimed to narrow the interpretation of the conditions applicable to intervention by trade associations and to send a signal in this regard. This is likely because applications to intervene by third parties can delay the judicial review procedure, for example by triggering confidentiality requests from the main parties, which take time to process. Nevertheless, Biocom appealed the refusal by the General Court to the ECJ.

ECJ grants Biocom leave to intervene

In its appeal, Biocom submitted a number of grounds for appeal, including that:

• the General Court erred in law in holding that the legal questions of principle raised in Illumina's action against the merger prohibition did not specifically affect the pharmaceutical sector; and
• the General Court breached its obligation to properly state reasons.

On 7 December 2023, the Vice-President of the ECJ granted Biocom leave to intervene in support of Illumina's appeal, thereby quashing the General Court Order from July 2023. In his assessment, the Vice-President of the ECJ emphasized that:

• contrary to the finding of the General Court, the Illumina/Grail case would have a particular impact on the way in which certain concentrations in the pharmaceutical sector are likely to be handled in the future, especially if they fall below the standard jurisdictional thresholds for intervention in merger situations. According to the ECJ, this should have been enough for the General Court to hold that the case raises questions of principle affecting the functioning of the pharmaceutical sector in particular – a sector in which some of Biocom’s members are active; and
• that the reasoning of the General Court was insufficient to enable Biocom to become aware of the reasons why the fourth condition – that the interests of the association’s members must be affected significantly by the forthcoming judgment – were not satisfied. That statement of reasons also did not constitute sufficient evidence for the ECJ to be in a position to exercise its power of review on the assessment made by the General Court.

This expected but significant decision reiterated the ECJ's relatively broad interpretation of the right of intervention in competition-related cases, especially where professional associations are concerned – an area where in the past, it has shown itself more willing to grant leave to intervene than the General Court.⁶ In this vein, the order of the Vice-President recalled the four conditions already established in its case law⁷ under which an association may be granted leave to intervene and applied them to the facts of this case:

1. First, the association must represent a significant number of undertakings active in the sector concerned – here, the pharmaceutical sector.
2. Second, the association’s constitutional objects must include the protection of the interests of its members.
3. Third, the case must raise questions of principle affecting the functioning of the sector concerned.
4. Fourth, the interests of the association’s members must be affected significantly by the forthcoming judgment.

The Vice-President then proceeded to summarise the reasons underlying its decision to annul the General Court's decision in this matter and grant the application to intervene. Key points drawn out to this end included:

• that “such a broad interpretation of the right to intervene in favour of representative professional associations is intended to facilitate assessment of the context of such cases submitted to the EU Courts while avoiding multiple individual interventions which would compromise the efficiency and the proper course of the procedure”⁸; and
• the principle of “broad interpretation of the right of intervention of professional associations representing undertakings in the sector concerned by a case”.⁹

In so doing, the ECJ appears to acknowledge, value, and seek the input of players knowledgeable in the concerned markets. Furthermore, the Vice-President of the ECJ evidently thinks that allowing a trade association to intervene is a very efficient way of obtaining this input, as they can consolidate and speak for a number of their members – thereby avoiding the need to hear undertakings on a more individual basis, which would be much more cumbersome.

Moreover, the ECJ has sent an important signal to the General Court, flagging that it failed to correctly draw the line in its recent assessments of applications to intervene. The Vice-President's order emphasised, in a clear and strong statement, the importance of the right to intervene for representative professional associations and acknowledged the need to protect the efficient working of the courts.

In addition to the principle that the right of professional associations to intervene should be interpreted quite broadly, the order of the Vice-President stressed that the facts of this case made the decision to grant the leave to intervene even more compelling. Article 22 of the EU merger regulation is more likely to apply to mergers of undertakings active in sectors such as life sciences, which are characterized by a large number of start-up undertakings present on the market. Given the above, the Illumina/Grail case is of particular interest to members of Biocom, as it represents life sciences undertakings incorporated in the US, both those in their start-up phase, who may be seeking funding, and large undertakings on the lookout for commercial opportunities to invest. Biocom's intervention was thus warranted.

Key takeaways

At a time when regulators and courts might appear preoccupied with big players and the concentration of market power in the hands of a few, it is interesting to consider how the EU courts may ensure the voices of other market participants can still be heard.

This case appears to open the door for more professional associations to intervene in European litigation, where such litigation raises questions of principle which could affect the functioning of the sector concerned and significantly affects the interests of the association’s members. Whilst this will need to be established on the facts of each case, with potentially greater opportunities for professional associations to intervene in highly technical and evolving markets, the overall message is clear: the EU courts will consider all the relevant circumstances in deciding whether to listen to professional associations by way of a formal court intervention. 

With this in mind:

• Businesses should consider if joining or becoming more active in their trade association might be advantageous, or potentially offer a way to have their voice heard. An intervention by individual players will always be harder, and sometimes acting via a trade association might be commercially more prudent;
• Trade associations might wish to monitor opportunities for intervention, factoring in risks and benefits in each case; and
• Businesses dealing with trade associations should be aware of their potential standing in EU courts.

Furthermore, although the facts and legal analysis of this case was limited to the scope of the right to intervene by professional associations associations in the context of a prohibited merger in a nascent sector, the order may be read in the wider context of EU competition litigation – it may be relevant for other third parties, such as complainants or non-addressee parties of a Commission cartel decision that decided not to appeal it, but still have some interest in the outcome of the case. Moreover, with the new EU Digital Markets Act regime taking effect, there seems to be a fresh wave of opportunities for smaller players to assist the Commission and European Courts as they seek to handle the market behaviour of the largest digital players.¹⁰

The Antitrust & Competition team of Mayer Brown comprises lawyers who have a thorough knowledge of EU (procedural) law and extensive experience working in the EU public sector, in particular at the General Court (Court of Justice of the European Union). Mayer Brown is regularly assisting companies and trade associations in litigation matters before the Court of Justice of the European Union, including with regard to their applications to intervene.