Skip to main content
Press Release

Canon Inc., Toshiba Corporation Agree to Pay $5 Million for Violating Federal Antitrust Laws

For Immediate Release
Office of Public Affairs
Canon and Toshiba failed to observe the required waiting period in Canon’s $6.1 billion acquisition of Toshiba’s Toshiba Medical Systems Corporation

Canon Inc. and Toshiba Corporation have agreed to settle federal charges that the companies violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino Act (HSR Act), when Canon acquired Toshiba Medical Systems Corporation from Toshiba in 2016.

The companies will pay $2.5 million each to settle the charges. The settlement also requires the companies to implement HSR compliance programs and comply with inspection and reporting requirements, among other obligations imposed under the consent order.

The complaint alleges that Canon and Toshiba devised a scheme to avoid observing the waiting period required by the HSR Act for Canon’s acquisition of Toshiba’s subsidiary Toshiba Medical Systems Corporation (TMSC). According to the complaint, the scheme devised by Canon and Toshiba “had no purpose” other than to complete the sale of TMSC prior to March 31, 2016, and avoid the HSR Act’s waiting period requirements.

The complaint further alleges that long-running financial irregularities at Toshiba became public in 2015 and, as a result, Toshiba was facing financial difficulty. To shore up its financial statement, Toshiba needed to recognize the proceeds of the sale of TMSC by the end of its 2015 fiscal year on March 31, 2016. The complaint also alleges that, by Canon’s and Toshiba’s own admission, Canon could not acquire TMSC outright because “it simply was not possible to complete a significant acquisition of TMSC voting securities before the end of Toshiba’s fiscal year due to the review periods under various merger control laws.”

“The HSR Act is an essential tool for antitrust enforcement because it allows federal antitrust enforcers to review proposed acquisitions for potential anticompetitive effects before they occur. Canon and Toshiba structured their transaction for the purpose of avoiding the HSR Act’s requirements,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “An acquiring person may not enlist a third party to make an acquisition on its behalf to evade the HSR Act.”

“The prior notice provisions of the HSR Act are designed to allow the agencies to analyze a proposed transaction before it is consummated to determine whether it will harm competition,” said Bruce Hoffman, Director of the Federal Trade Commission’s Bureau of Competition. “Deliberately structuring a transaction to avoid or delay HSR filing undermines the efficacy of the premerger notification process, regardless of whether the parties’ motives for doing so in a particular case were anticompetitive. We will be vigilant in seeking relief against attempts to circumvent the HSR Act’s filing requirements.”

The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review. The maximum civil penalty for an HSR violation is currently $42,530 per day.

The Department of Justice filed the complaint and proposed final judgment in the U.S. District Court for the District of Columbia on June 10, 2019. 

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Kenneth A. Libby, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580 At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

Updated June 10, 2019

Press Release Number: 19-636