Canon loses court challenge against EU fine over 2016 acquisition

Japanese printer and camera maker Canon (7751.T) lost its appeal against a 28 million-euro ($29.4 million) EU fine on Wednesday as Europe's second-highest court upheld the fine for stepping over the line in the 2016 acquisition.

Companies that close the deal without first getting EU regulatory approval or giving incorrect details during the regulatory review could be fined as high as 10% of the total revenue under EU merger regulations.

In its decision in 2019, the European Commission in its 2019 decision stated that Canon violated its rules by using a "warehousing" two-step transaction structure that involved an interim buyer who was able to buy Toshiba Corporation's (6502.T) medical unit before receiving regulatory clearance.

The unconventional method enabled Toshiba, who struggled to find cash following an accounting crisis, to record profits in time for the end of the financial year in March.

In Luxembourg, the General Court backed the EU enforcement of the competition's decision.

"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 stated.

In a recent case involving gun-jumping in the EU competition watchdog, the EU competition regulator ordered U.S. biotech firm Illumina (ILMN.O) to maintain cancer detection company Grail Inc (GRAL.O) as a separate entity after the former concluded the transaction while waiting for the green regulatory signal.

The case is still in the process of being resolved.

The Commission has recently issued severe penalties for Meta (FB.O), General Electric (GE.N), and German drugmaker Merck KGaA for giving misleading details during their reviews of transactions.