Language of document : ECLI:EU:T:2022:299

Case T609/19

(publication in extract form)

Canon Inc.


European Commission

 Judgment of the General Court (Sixth Chamber), 18 May 2022

(Competition – Concentrations – Manufacturing of medical instruments – Decision imposing fines for implementing a concentration prior to notification and clearance – Article 4(1), Article 7(1) and Article 14 of Regulation (EC) No 139/2004 – Interim transaction and ultimate transaction – Parking structure – Single concentration – Rights of the defence – Legitimate expectations – Principle of legality – Proportionality – Amount of fines – Mitigating circumstances)

1.      Concentrations between undertakings – Examination by the Commission – Obligation to notify and standstill obligation – Concentration – Meaning – Implementation of the concentration – Acquisition of control over an undertaking through two separate legal transactions linked by a direct functional link – Parking of shares – Inclusion – Conditions

(Council Regulation No 139/2004, Arts 4(1) and 7(1))

(see paragraphs 61-70, 73-80, 99, 105, 108-115, 216-224, 228-235, 306, 312)

2.      Competition – EU rules – Infringements – Committed intentionally or through negligence – Meaning – Undertaking which could not have been unaware that its conduct was anticompetitive – No previous Commission decision relating to a similar infringement – Irrelevant

(Council Regulation No 139/2004, Arts 4(1), 7(1) and 14(2))

(see paragraphs 366, 367, 370-374)

3.      EU law – General principles of law – Principle that penalties must have a proper legal basis – Scope

(Charter of Fundamental Rights of the European Union, Art. 49(1); Council Regulation No 139/2004, Arts 4(1), 7(1) and 14(2))

(see paragraphs 382-391)

4.      EU law – Principles – Protection of legitimate expectations – Conditions – Commission’s previous decision-making practice – Irrelevant

(Council Regulation No 139/2004)

(see paragraphs 392-396, 398, 399)

5.      Concentrations between undertakings – Notification – Obligation – Infringement – Consequences – Automatic infringement of the corresponding prohibitions – Penalties

(Council Regulation No 139/2004, Arts 4(1), 7(1), and 14(2)(a) and b))

(see paragraphs 403-407)

6.      Competition – Fines – Commission decision imposing a number of penalties for the same conduct – Principles governing concurrent offences – Infringement – None

(Council Regulation No 139/2004, Art. 14(2))

(see paragraphs 409-411, 418)

7.      Competition – Fines – Amount – Determination – Principle of equal treatment – Commission’s decision-making practice – Indicative nature

(Council Regulation No 139/2004, Art. 14)

(see paragraphs 425, 426, 428)

8.      Concentrations between undertakings – Fines – Amount – Determination – Criteria – Absence of guidelines – Obligation to state reasons for the decision imposing a fine – Scope

(Art. 296, second para., TFEU; Council Regulation No 139/2004, Art. 14)

(see paragraphs 436, 437)

9.      Competition – Administrative procedure – Statement of objections – Necessary content – Respect for the rights of the defence – Scope – Obligation of the Commission to inform persons concerned of further objections – Conditions

(Charter of Fundamental Rights of the European Union, Art. 48(2); Council Regulation No 139/2004, Art. 18)

(see paragraphs 469-472)


The General Court dismisses the action brought by Canon, which was fined EUR 28 million by the Commission for failure to comply with merger control rules in its acquisition of Toshiba Medical Systems Corporation

In 2016, Canon Inc. (‘the applicant’), a Japanese multinational company specialising in the manufacture of optical and image processing products, took over Toshiba Medical Systems Corporation (‘TMSC’), a wholly owned subsidiary of Toshiba Corporation (‘Toshiba’).

That acquisition was carried out in two steps, through a securitisation vehicle (MS Holding) created specifically for that purpose. In the first step, on 17 March 2016, MS Holding acquired certain voting shares of TMSC for approximately EUR 800, while the applicant, in consideration for payment of the full price agreed for the purchase of TMSC (approximately EUR 5 280 000 000), acquired call options on all the remaining voting shares in TMSC. In addition, the applicant acquired the one non-voting share in TMSC for approximately EUR 40 (‘the interim transaction’).

In a second step, on 19 December 2016, after obtaining merger clearance from the European Commission, the applicant exercised its options to acquire the underlying voting shares of TMSC, while TMSC purchased its voting shares held by MS Holding as well as the non-voting share held by the applicant (‘the ultimate transaction’). By those two transactions, TMSC became a wholly owned subsidiary of the applicant.

The rationale for the staged acquisition was that the sale of TMSC would be recognised as a capital contribution in Toshiba’s accounts by 31 March 2016 at the latest, without the applicant formally acquiring control until it had obtained the necessary clearances from the relevant competition authorities.

Following a pre-notification sent by the applicant in March 2016, the concentration was notified to the Commission in August and cleared by the Commission in September of the same year.

However, in parallel, the Commission opened an investigation into possible violations of the obligation to notify and the standstill obligation under the Merger Regulation. (1) Under those obligations, undertakings involved in a concentration with a European dimension must notify their plans to the Commission for examination before they are implemented (‘obligation to notify’) (2) and may not implement the notified operation before obtaining clearance from the Commission (‘standstill obligation’). (3)

By its decision of 27 June 2019, (4) the Commission found that the applicant had infringed those obligations in that it had prematurely implemented its acquisition of TMSC. In essence, the Commission considered that, by proceeding with the interim transaction, the applicant had partially implemented the single concentration consisting of the acquisition of TMSC and had thereby infringed the standstill obligation and obligation to notify. For that reason, the Commission imposed two fines totalling EUR 28 million.

The applicant brought an action for annulment of that decision, which was dismissed in its entirety by the Sixth Chamber of the Court.

The Court’s assessment

The Court begins by rejecting the applicant’s argument that the interim transaction did not result in the acquisition of control of TMSC and therefore did not constitute an infringement of the obligation to notify and the standstill obligation under the Merger Regulation.

Referring to the settled case-law of the Court of Justice, (5) the General Court notes in that respect that a concentration is implemented as soon as the parties to the concentration carry out operations which contribute to a lasting change of control over the target undertaking. Any partial implementation of a concentration thus falls within the scope of the standstill obligation, which meets the requirement of ensuring effective merger control. With that in mind, the Merger Regulation treats closely related transactions as a single concentration, with the sole exception of cases where such transactions are not necessary to achieve a change of control over the target undertaking and therefore do not have a direct functional link with the implementation of the concentration.

The Commission was therefore right to observe that the Court of Justice’s case-law distinguishes between the concepts of ‘concentration’ and ‘implementation of a concentration’. While a ‘concentration’ is only deemed to have been implemented when a lasting change of control takes place, the ‘implementation’ of a concentration can take place as soon as the parties to a concentration implement operations contributing to a lasting change of control of the target undertaking, that is to say possibly before the acquisition of control of such an undertaking.

Therefore, the test for determining whether the obligation to notify and the standstill obligation were infringed by the applicant is not whether there was an acquisition of control of TMSC prior to the clearance of the concentration, but whether the contested actions contributed, in whole or in part, in fact or in law, to the change of control of that undertaking before that date.

In that context, the General Court also rejects the applicant’s argument that the Commission’s control of the merger was not at any time and in any way impeded, since the applicant acquired control of TMSC only after it had obtained all the clearances from the competition authorities concerned. According to the applicant, as long as control is not acquired, the concentration cannot be implemented in advance. A partial implementation of a concentration would thus require the acquisition of partial control. However, according to the Court, either control is acquired, when an entity has the possibility to exercise decisive influence over the target company, or it is not. Therefore, an alleged ‘partial control’ cannot be the condition for a partial implementation of the concentration. The Court also notes that, in order to be effective, the Commission’s control must be carried out before the merger is implemented, even partially.

Referring to its own case-law, (6) the Court also rejects the applicant’s argument that the interim transaction did not constitute a partial implementation of the concentration.

In that regard, the Court notes that a concentration may be implemented in the presence of a number of formally distinct legal transactions and that in such a case it is for the Commission to assess whether those transactions constitute a single concentration in that they are unitary in nature. In the presence of several legally distinct transactions, it is thus for the Commission to identify, in the light of the factual and legal circumstances of each case, the economic purpose pursued by the parties, by examining whether the undertakings concerned would have been prepared to enter into each transaction in isolation or whether, on the contrary, each transaction constitutes only one element of a more complex operation, without which it would not have been entered into by the parties.

In that context, the Commission did not err in classifying the interim transaction as a partial implementation of the concentration. It was right to find that, from the date of the interim transaction, and irrespective of the outcome of the merger clearance, the applicant had acquired the possibility of exercising a certain degree of influence over TMSC since, following the completion of that transaction, it had sole power to determine the identity of the ultimate purchaser of the latter.

The Court also disputes the applicant’s argument that the interim transaction did not have a direct functional link with the change of control of TMSC and therefore did not contribute to the change of control. The Court considers that, without the two-step transaction structure proposed by the applicant, Toshiba would have been unable to relinquish control of TMSC and irreversibly collect payment from TMSC before the end of March 2016. Moreover, under that two-step structure, the interim transaction was a necessary step to achieve a change of control of TMSC. In fact, the objective of that two-step structure was that the interim transaction would allow, first, an intermediate buyer to purchase all the voting securities of TMSC and, secondly, the applicant to pay the price of TMSC to Toshiba in an irreversible manner while obtaining the greatest certainty as to whether it would ultimately acquire control of TMSC.

The Court dismisses the action in its entirety and orders the applicant to pay the costs.

1      Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (OJ 2004 L 24, p. 1) (‘the Merger Regulation’).

2      Merger Regulation, Article 4(1).

3      Merger Regulation, Article 7(1).

4      Commission Decision C(2019) 4559 final of 27 June 2019 imposing fines for failing to notify a concentration in breach of Article 4(1) of Council Regulation (EC) No 139/2004 and for implementing a concentration in breach of Article 7(1) of that regulation (Case M.8179 – Canon/Toshiba Medical Systems Corporation).

5      Judgment of 31 May 2018, Ernst & Young (C‑633/16, EU:C:2018:371).

6      Judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (T‑282/02, EU:T:2006:64).