# Canon Stock Price Drops to More Than Two-Month Low After EU Threatens Huge Fine



## Canon Rumors Guy (Jul 7, 2017)

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<em>Canon fined for not including 4K on the EOS 6D Mark II? </sarcasm></em></p>
<p><strong>From Reuters:</strong></p>
<blockquote><p>Canon Inc’s stock fell to its lowest levels in more than two months on Friday after EU regulators said they may fine it up to 10 percent of annual revenue for jumping the gun in its acquisition of Toshiba Corp’s medical unit.</p>
<p>The EU Commission said it had reached a preliminary view that Canon breached rules by using a so-called “warehousing” two-step transaction structure involving an interim buyer to buy the company prior to obtaining relevant approvals.</p>

<p>Ten percent of Canon’s annual revenue would be roughly equivalent to $2.9 billion.</p>
<p>The $6 billion deal, completed late last year, raised eyebrows at the time due to the unorthodox method which allowed Toshiba, which was struggling for cash after an accounting scandal, to book proceeds in time for the financial year-end in March.</p>
<p>Rival bidder Fujifilm Holdings Corp  had criticized it as a “mockery of the law”.  <a href="http://www.reuters.com/article/us-eu-antitrust-canon-idUSKBN19S09J">Read the full story</a></p></blockquote>
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## Khalai (Jul 7, 2017)

Wut? I hope this has some legal merit and it's not just another EU Comitee meddling...


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## Canon Rumors Guy (Jul 7, 2017)

jayt567 said:


> Ummm.....where is there any mention of the lack of 4K in this article?



Are you serious?


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## Mt Spokane Photography (Jul 7, 2017)

The Europeans are always trying to levy big fines on foreign companies in order to prop up their currency. Somehow, all European companies never have a issue and are never fined.


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## IglooEater (Jul 7, 2017)

Canon Rumors said:


> jayt567 said:
> 
> 
> > Ummm.....where is there any mention of the lack of 4K in this article?
> ...



oh my.... where's the face palm emoticon when I need it?


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## magarity (Jul 7, 2017)

Mt Spokane Photography said:


> The Europeans are always trying to levy big fines on foreign companies in order to prop up their currency. Somehow, all European companies never have a issue and are never fined.


This site only reported the Canon part but the same EU announcement did indeed include a fine for Merck. Anyway, I can't help but wonder what's the EU's jurisdiction over a Japanese company buying a subsidiary of another Japanese company.


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## nightscape123 (Jul 8, 2017)

The EU has to pay for its Socialism somehow. They've run out of their own money. 

Does canon even do $3 billion in business in the EU? Might be better for them to just pull out.


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## Valvebounce (Jul 8, 2017)

Hi Nightscape. 
We in the U.S.E. or United States of Europe, (not for much longer here thankfully) resent that comment, well I do anyway! 
Seriously though, judging from the bad will generated by Lancia when they pulled out of the UK market in the eighties because their cars dissolved in the first rain shower (no they still haven't been forgiven by many) this would be a very bad move for Canon! 

Cheers, Graham. 



nightscape123 said:


> The EU has to pay for its Socialism somehow. They've run out of their own money.
> 
> Does canon even do $3 billion in business in the EU? Might be better for them to just pull out.


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## Orangutan (Jul 8, 2017)

Mt Spokane Photography said:


> The Europeans are always trying to levy big fines on foreign companies in order to prop up their currency. Somehow, all European companies never have a issue and are never fined.



Like Volkswagen? 

Seriously, though, that's a mighty big statement. I'll concede that it could well be true; however, it's equally possible that European companies have developed in the EU regulatory structure, and have a better idea of what will fly and what won't.


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## KeithBreazeal (Jul 8, 2017)

Legally, how are they going to prove they were damaged?


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## Orangutan (Jul 8, 2017)

IglooEater said:


> Canon Rumors said:
> 
> 
> > jayt567 said:
> ...



Now where did I leave that bag of context, it was just here a minute ago.


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## Orangutan (Jul 8, 2017)

KeithBreazeal said:


> Legally, how are they going to prove they were damaged?



Regulatory agencies of sovereign entities don't need to do that.


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## Maiaibing (Jul 8, 2017)

Khalai said:


> Wut? I hope this has some legal merit and it's not just another EU Comitee meddling...


Its called upholding "consumer protection and fair business practices". Canon can go to court if it happens and they think they have a case.


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## AlanF (Jul 8, 2017)

Mt Spokane Photography said:


> The Europeans are always trying to levy big fines on foreign companies in order to prop up their currency. Somehow, all European companies never have a issue and are never fined.



Come off it - that is complete and utter garbage! European banks have been and are still being fined tens of billions by the US over issues from sub-prime to currency exchange rigging. Have you forgotten how BP was taken to the cleaners for many tens of billions by the Obama administration for the Gulf of Mexico incident, and Obama called it British Petroleum, an obsolete name? And what about VW being fined over the diesel scandal?


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## LDS (Jul 8, 2017)

Valvebounce said:


> because their cars dissolved in the first rain shower



Just like the whole British car industry?


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## LDS (Jul 8, 2017)

magarity said:


> I can't help but wonder what's the EU's jurisdiction over a Japanese company buying a subsidiary of another Japanese company.



If they have operations in EU they need approval from EU authorities as well, and follow EU rules also. Hitachi and Western Digital had to obey Chinese antitrust ruling for their merger, for the matter. Globalization means also this.

Meanwhile, anyway, EU and Japan struck a commercial deal which will impact car and electronic devices imports from Japan, removing some limitations and fees. Let's see if Canon products here will become cheaper...


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## Orangutan (Jul 8, 2017)

LDS said:


> magarity said:
> 
> 
> > I can't help but wonder what's the EU's jurisdiction over a Japanese company buying a subsidiary of another Japanese company.
> ...


One of the important goals of international trade agreements is to regularize these processes. Sounds good in theory, devilishly difficult in practice.


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## AlanF (Jul 9, 2017)

Orangutan said:


> LDS said:
> 
> 
> > magarity said:
> ...



True. The rules are there to protect us all as consumers, from pharmaceuticals to investments. Canon probably doesn't have to pay the fine but if if it doesn't it won't be able to trade in the EU.


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## zim (Jul 9, 2017)

AlanF said:


> Orangutan said:
> 
> 
> > LDS said:
> ...



Like the whole of Canon inc. ? Their entire portfolio across every business sector? I wonder who that would actually hurt more!


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## YuengLinger (Jul 10, 2017)

Relevant topic, for sure, but how can we avoid politics? What a debacle.


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## Mikehit (Jul 10, 2017)

YuengLinger said:


> Relevant topic, for sure, but how can we avoid politics?



Because it is nothing to do with politics. It is about law and business and so far I haven't seen anyone blaming pinko/fascist/liberal protectionist policies which is fine by me


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## Ozarker (Jul 10, 2017)

Mikehit said:


> YuengLinger said:
> 
> 
> > Relevant topic, for sure, but how can we avoid politics?
> ...



It has everything to do with politics. The EU is a political entity. The politicians make the laws or rules. The EU is the entity imposing the fines. It is all about politics no matter what company is being levied.


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## sanj (Jul 10, 2017)

jayt567 said:


> Ummm.....where is there any mention of the lack of 4K in this article?



Hahahaha. ;D ;D


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## Mikehit (Jul 10, 2017)

CanonFanBoy said:


> Mikehit said:
> 
> 
> > YuengLinger said:
> ...



OK, then. Let's say it is possible to discuss the impact of the legislation without entering into politics.


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## scrup (Jul 11, 2017)

More money for the EU since the UK is leaving.

All these regulations the EU imposes to safe guard the dummies drives the cost up for everyone else.


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## grainier (Jul 11, 2017)

IMO, Euro Commissars should stick to measuring babana curvatures.


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## Talys (Jul 12, 2017)

Yeah, frankly, I'm a little amazed that the rest of the world has put up with the EU's ginormous fines. I'm a little surprised that there haven't been retaliatory fines in other countries against EU manufacturers.

Not that I think companies should get away with doing whatever they want and ignore local laws, but the EU fines seem draconian... and suspiciously often against American and Asian manufacturers. It makes me think protectionism, in another guise.


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## Mikehit (Jul 12, 2017)

Talys said:


> Yeah, frankly, I'm a little amazed that the rest of the world has put up with the EU's ginormous fines. I'm a little surprised that there haven't been retaliatory fines in other countries against EU manufacturers.
> 
> Not that I think companies should get away with doing whatever they want and ignore local laws, but the EU fines seem draconian... and suspiciously often against American and Asian manufacturers. It makes me think protectionism, in another guise.



Try reading the actual article instead of jumping on your high horse. This is a preliminary finding and the fine is threatened. The EU has identified as way it thinks the company is (shall we say) interpreting the process to enable it to act as though it had bought the company before it actually had. This is quote from Fujifilm in the linked article (you know, the camera company asnd nto an EU shill as far as I know)



> Rival bidder Fujifilm Holdings Corp had criticized it as a "mockery of the law".



What scale of fine do you think was appropriate? If you believe the fine is excessive you have to have some idea of what is reasonable. Or is it that it has a lot of zeros in it?


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## LDS (Jul 12, 2017)

Talys said:


> Not that I think companies should get away with doing whatever they want and ignore local laws, but the EU fines seem draconian... and suspiciously often against American and Asian manufacturers. It makes me think protectionism, in another guise.



You may have missed this, for example: http://europa.eu/rapid/press-release_IP-13-1208_en.htm, or this http://europa.eu/rapid/press-release_IP-17-1741_en.htm. Not every fine gets the press attention, but European companies are routinely fined for breaking the rules.

It is true that for several reasons EU adopted a far stronger stance on competition. Also, many rules has been strengthened after the 2008 crisis attempting to avoid another.

And what about US going after Takata executives for the exploding airbags? A Chinese/US competitor will benefit from Takata bankruptcy. Meanwhile in Japan there's been a string of scandals (i.e. Olympus and Toshiba) - not the EU is immune, see the Italian and Spanish banks that went bankrupt (and external interventions needed EU approval).

Note that the fine Canon should pay if found infringing the rules is not yet set - it may be "up to 10%", but it may be far lower. Anyway, when companies have profits of several billions, a €100,000, or even a €1,000,000 fine is just a slap on the wrist.


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## LonelyBoy (Jul 12, 2017)

And the US fined Samsung, and around and around and around we go. Anyone acting like this is behavior unique to the EU, or a result of _Socialism!_ is ill-informed.


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## Mt Spokane Photography (Jul 12, 2017)

AlanF said:


> Mt Spokane Photography said:
> 
> 
> > The Europeans are always trying to levy big fines on foreign companies in order to prop up their currency. Somehow, all European companies never have a issue and are never fined.
> ...




Yes, the US does fine companies doing business in the US and causing financial harm to citizens and companies. In the case of the banks, US citizens were directly affected and lost money due to the rigging and other issues. The banks have branches and do business in the US. BP also caused physical damage in the US, and most affected parties never totally recovered their losses.

Canon has physical Offices in Europe, and so does Toshiba, so they can be fined for damage to citizens or companies. The part about any damage to European citizens/companies escapes me, but lawyers can always twist things. 

My Comment was more to the effect that we never see the European commission levying huge fines against European companies, they mostly exist as a source of income. I have nothing against any actions that have caused damage to European citizens or any country for that matter.

I remember when they fined Microsoft a billion or more dollars because Microsoft did not make their software open, and then piled on more because some professor could not understand the documentation. Apparently the lack of published source code for the software caused a lot of issues for Russian Hackers.


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## Talys (Jul 13, 2017)

Mikehit said:


> Talys said:
> 
> 
> > Yeah, frankly, I'm a little amazed that the rest of the world has put up with the EU's ginormous fines. I'm a little surprised that there haven't been retaliatory fines in other countries against EU manufacturers.
> ...



I was not referring to specifically Canon. The EU has levied many huge antitrust-type fines (billions of dollars) against a number of non-European tech companies. I'm not sure what warnings and remedial steps the EU takes to get there. I don't think many people would argue that the EU levies significantly larger fines in significantly more cases, than other first-world areas, like the North America (including Mexico), South-East Asia (Korea, Japan, Taiwan, etc.) and Australia.

I'm not counting, but I rarely see European tech, manufacturing, or automotive giants get hit fines of that scale. For example, I'm thinking Siemens, Nokia, or Mercedes-Benz -- as opposed to Microsoft or Google -- or Canon.

Besides, I'm not saying that they aren't within their rights to do so; only that it's surprising that companies like Microsoft and Google (or Canon) haven't lobbied their home countries for reciprocal fines of "misbehaving" European giants of their industry.

Then again, I suppose, putting aside Canon for a moment, for most of those really big tech companies (which are much wealthier than Canon) a couple of billion here or there isn't a big deal, especially in Europe, because they can't repatriate that money without paying massive taxes anyhow.


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## Mikehit (Jul 13, 2017)

Talys said:


> I'm not counting, but I rarely see European tech, manufacturing, or automotive giants get hit fines of that scale. For example, I'm thinking Siemens, Nokia, or Mercedes-Benz -- as opposed to Microsoft or Google -- or Canon.



Maybe because the biggest companies are US and Asia-based.



Talys said:


> Then again, I suppose, putting aside Canon for a moment, for most of those really big tech companies (which are much wealthier than Canon) a couple of billion here or there isn't a big deal, especially in Europe, because they can't repatriate that money without paying massive taxes anyhow.


I guess that's more the explanation - making the fine bear some relation to the size of the company and the benefits they accrued as a result of the naughty naughty things they did.


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## LDS (Jul 14, 2017)

Mt Spokane Photography said:


> I remember when they fined Microsoft a billion or more dollars because Microsoft did not make their software open, and then piled on more because some professor could not understand the documentation. Apparently the lack of published source code for the software caused a lot of issues for Russian Hackers.



You're wrong. MS was never fined because its software was not open. It was fined because it actively denied interoperability with other systems. The result was it had to publish the relevant specifications (not the code) so other systems can communicate with Microsoft systems. Also, MS can still ask for licenses and royalties - but was fined again because it set unreasonably high royalties.

If your Windows, Mac or Linux can easily use SMB to read and write files to a NAS, regardless of the operating system, thank that EU ruling. Of if your Android phone can talk to an Exchange server.

Then there were the Internet Explorer issue. Again, without the EU you wouldn't have had Firefox and Chrome.

Hackers have no issue to break into system even without source code. Vulnerabilities are found in a different way.


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## LDS (Jul 14, 2017)

Talys said:


> I'm not counting, but I rarely see European tech, manufacturing, or automotive giants get hit fines of that scale. For example, I'm thinking Siemens, Nokia, or Mercedes-Benz -- as opposed to Microsoft or Google -- or Canon.



Maybe because you don't follow that news - it depends what news outlets you follow. Some well known names will hit the newslines, other less known ones won't.

Read one of the links I published before, "Antitrust: Commission fines banks € 1.49 billion for participating in cartels in the interest rate derivatives industry". Among the fined banks are Deutsche Bank, Société Générale, RBS.

Or this one: "The European Commission has found that MAN, Volvo/Renault, Daimler, Iveco, and DAF broke EU antitrust rules. These truck makers colluded for 14 years on truck pricing and on passing on the costs of compliance with stricter emission rules. The Commission has imposed a record fine of € 2 926 499 000." (http://europa.eu/rapid/press-release_IP-16-2582_en.htm, Daimler is the Mercedes-Benz parent company).

Siemens was fined for 400 millions euros in 2007 (http://europa.eu/rapid/press-release_IP-07-80_en.htm?locale=en).


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