By Foo Yun Chee
BRUSSELS (Reuters) -Japanese camera and printer maker Canon lost its challenge against a 28 million euros ($29.4 million) EU fine on Wednesday after Europe’s second-top court upheld the sanction imposed for jumping the gun in a 2016 acquisition.
Companies which close a deal without first securing EU regulatory approval or provide misleading information during the regulatory review can face fines up to 10% of their aggregated turnover under EU merger rules.
The European Commission in its 2019 decision said Canon breached the rules by using a so-called “warehousing” two-step transaction structure involving an interim buyer to purchase Toshiba Corp’s medical unit before gaining regulatory clearance.
The unorthodox method allowed Toshiba, which was struggling for cash after an accounting scandal, to book proceeds in time for the financial year-end ending in March.
The Luxembourg-based General Court backed the EU competition enforcer’s finding.
“The (European) Commission was therefore right to observe that the Court’s case-law distinguishes between the concepts of ‘concentration’ and ‘implementation of a concentration’,” judges said.
In a recent gun-jumping case, the EU competition watchdog ordered U.S. life science company Illumina’s to keep cancer detection test maker Grail Inc as a separate company after the former completed the deal while still waiting for the regulatory green light. The case is still pending.
The Commission has in recent years handed out stiff fines to Meta, General Electric and German drugmaker Merck KGaA for giving misleading information during reviews of their deals.
The case is T-609/19 Canon V Commission.
($1 = 0.9515 euros)
(Reporting by Foo Yun Chee; editing by David Evans)