(Bloomberg) -- Illumina Inc.’s struggle to save its $7 billion acquisition of cancer-test provider Grail Inc. entered the final stages in a court challenge to the European Union’s recent eagerness to probe deals that once flew under the radar.

At a hearing at the EU’s Court of Justice, lawyers for Illumina and Grail attacked the European Commission for “orchestrating a plan to assume jurisdiction” over a combination that lacked any discernible footprint in the 27-nation EU. 

“Never before had it wanted to review a merger where the target has no presence whatsoever in the EU and yet because of the commission’s overreach, we are indeed in the undesired situation,” Grail lawyer Javier Ruiz Calzado told a 15-judge panel. A final ruling is expected in the coming months. 

While the appeal is pivotal for Illumina’s hopes of reviving its stalled purchase, it throws up key questions about the new EU deals-vetting policy that’s most recently been used on Qualcomm Inc.’s purchase of Israeli chipmaker Autotalks and a Deutsche Boerse AG unit’s buyout of Nasdaq Inc.’s European power trading business. The change was put in place in 2021 to pick up takeovers of low- or zero-revenue targets that previously escaped a proper review — a source of frustration particularly over Big Tech’s appetite for snapping up fledgling rivals.

The EU’s new policy “runs counter to the principles of legal certainty, proportionality and subsidiarity” and “allows a form of what might be called competence creep,” said Daniel Beard, a lawyer representing Illumina. Beard accused regulators of keeping the firms in the dark, through an “intentional silence” and “secretive process, which the parties had no idea about.”

Read More: Vestager Has Deals in Sight for EU Killer-Acquisition Crackdown

Illumina has been pushing back against close antitrust scrutiny on both sides of the Atlantic of its bid to re-purchase Grail — spun off from the DNA-sequencing giant in 2016 to develop a blood test to detect 50 types of cancer in early stages. 

The commission dismissed most claims on Tuesday as inadmissible. 

“Illumina and Grail’s arguments are essentially a policy manifesto about what they think should be the jurisdictional limits of EU merger control,” Nicholas Khan, a lawyer for the EU regulator, told the court.

For Illumina, only a win will do. Defeat at the EU court in Luxembourg would lead it to abandon all hope of resurrecting the deal, regardless of the outcome of a parallel challenge at a US appeals court over the Federal Trade Commission’s April order to sell off Grail.

Illumina named Agilent Technologies Inc.’s Jacob Thaysen as its new chief executive officer in September after former CEO Francis deSouza abruptly left the firm amid an investor proxy fight with billionaire investor Carl Icahn, who backed the leadership change. 

Like for Illumina, much is also at stake for the EU commission’s competition arm, led again by Denmark’s Margrethe Vestager after she returned from a failed job application for the European Investment Bank. 

“This is a hugely important case,” said Stijn Huijts, a lawyer at Geradin Partners in Brussels. “If the commission’s approach is upheld, it has within a short window, and without legislative changes, established a position where problematic deals that fall below any European notification threshold can be called in for review.”

“If the commission loses, it will surely call for changes to the system,” said Huijts.

Advocate General Nicholas Emiliou will give a non-binding opinion on the case on March 21. The EU court, which often follows such opinions, normally issues its rulings some 4 to 6 months later.

The cases are: C-611/22 P Illumina v. Commission, C-625/22 P Grail v. Commission.

(Updates with background and court opinion date from 10th paragraph)

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