Toshiba, Canon To Pay $5 million For antitrust lawsuit

As per the release , the companies( Canon and Toshiba) had violated the law during Canon’s purchase of Toshiba’s medical systems arm.

Toshiba and Canon have agreed to pay a $5 million fine to settle a federal case which alleged the companies violated US antitrust laws.

According to the US Department of Justice (DoJ), the tech giants will pay the fee in order to settle federal charges which claim Toshiba and Canon violated the Hart-Scott-Rodino Act(HSR Act) during Canon's acquisition of Toshiba Medical Systems (TMSC). Canon Inc. and Toshiba Corporation have agreed to settle Federal Trade Commission charges that the companies violated the pre merger notification and waiting period requirements of the Hart-Scott-Rodino Act, or 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 acquisition was agreed in 2016 for $6.1 billion. At the time, Canon said that purchasing the medical systems would help Canon "embrace the challenge of new growth through a grand strategic transformation.Canon sought clearance for the deal before public disclosure, and "clearance was obtained from the competition authorities of every country and region where Canon applied.

Canon and Toshiba, it seems, did not honor the waiting period. The complaint alleges that the companies schemed to complete the sale of TMSC before March 31, 2016, and to "avoid the HSR Act's waiting period requirements."

Furthermore, federal agents claim that the rush was due to Toshiba's precarious financial position in 2015. The company was dealing with the aftermath of an accounting scandal, caused by overstating its profits by close to $2 billion over seven years, in order to meet corporate targets.

Canon and Toshiba will split the bill equally and will pay $2.5 million each. In addition, the DoJ requires both firms to implement HSR compliance programs in the future.