UK CMA & ILMN/PACB: The Inconvenience of Being Earnest.

As part two of a yet-to-be-determined number of pieces on the UK's CMA preliminary analysis of the proposed Pacific Biosciences acquisition by Illumina, I'd like to briefly explore the surprising authority of this agency to plumb internal documents at the two companies.
If you work in industry, then somewhere along the way you are likely to get some tutelage from legal departments about being careful what you write down.  Generally it is around IP, as that is where careless text can cause great mischief.  For example, one never discusses violating someone else's patents, even in jest -- that is a sure path to self-destruction should the issue ever be litigated.  

But this isn't technically litigation, at least according to anything I heard during the sum of all my time in law school. While the details are nearly always redacted, as I discussed previously, it is clear a that the CMA got to look through a lot of documents which were never intended to be seen outside the companies.  Some documents were prepared around the merger process, and the CMA is candid about stating that these are less trustworthy; at that point the idea that regulatory agencies might be looking over their shoulder would likely appear.

Some of the comments by the CMA are presumably boilerplate but come off as a bit silly.  For example, there is discussion as to the fact that PacBio kept tabs on Illumina and Illumina likewise on PacBio.  Of course they did!  Only a company run by fools wouldn't track any and all companies that might ever become competitors.  Apparently the intensity of document generation and the exact (but redacted) details give a full picture that each company was diligent in exploring possible overlaps in the two businesses.  Also, when it comes to these analyses the CMA appears to take everything at face value; if some Dr. Quixote in PacBio's marketing found some windmills to tilt at in Illumina, that would appear to be treated without skepticism.

That a regulatory agency might have such long tendrils probably shouldn't come as a surprise, but it does have potential side effects.  We've recently seen the sorry spectacle of the UK's Ambassador to my country exiting stage left because his highly candid assessments of the current U.S. Administration were leaked; they hit far too close to the mark for him to continue.  It is well nigh impossible in modern business to not commit ones ideas to electronic form, but the fact is that it is here the two companies discussion of each other is being used against their own case.  That probably won't change much behavior, but it certainly should give a moment of pause.

I also note one class of document that the CMA did not obtain.  Of course, with all the redactions it is impossible to be certain, but the document does follow a pattern of making a mostly unredacted point followed by sub-points which are often completely redacted.  So the general nature of an argument or analysis is mostly clear, but the details of the argument aren't -- so if we never see a particular class of argument, it probably wasn't there.  While the overall pricing of systems and costs per gigabase are discussed, the margins are not! And it would be my contention that this is a very important point, a case (along with others) I will attempt to explore soon.