The Canon decision and gun-jumping under the Irish merger control rules
Last month in Canon v Commission (Case T-609/19), the EU's General Court upheld the European Commission's €28m fine on Canon in 2019 for gun-jumping in relation to its two-step acquisition of Toshiba Medical Systems Corporation (TMSC).
Under the EU Merger Regulation (EUMR), parties to a notifiable transaction must: (i) notify the transaction to the European Commission (Commission) before implementation (i.e. the obligation to notify), and (ii) not implement the transaction before it has been approved by the Commission (i.e. the standstill obligation). A breach of these obligations can lead to substantial fines under the EUMR.
The General Court’s decision (which may yet be appealed) sheds further light on these gun-jumping issues. These include what might constitute premature implementation of a transaction prior to notifying and obtaining Commission approval under the EUMR. In particular even contributions to a change of control in a transaction can constitute gun-jumping.
The decision also provides pointers for the Irish merger control rules on gun-jumping (i.e. contained in the Competition Act 2002 (as amended) (Competition Act)) for multistep transactions. This is particularly noteworthy in light of the more vigorous gun-jumping rules contained in the Competition (Amendment) Bill 2022 (Bill) and which is expected to come into force.
For more information on this topic please contact any member of A&L Goodbody's Corporate and M&A or EU, Competition & Procurement teams.
Date of publication: 9 June 2022