CELEX: 62019TJ0609
Competition
Concentrations
Medical equipment manufacturing sector
Decision imposing fines for implementing a concentration prior to notification and authorisation
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

)
I.

Background to the dispute
The applicant, Canon Inc., is a multinational company specialising in the manufacture of imaging and optical products, including cameras, camcorders, photocopiers, steppers and computer printers. Since its acquisition of Toshiba Medical Systems Corporation (‘TMSC’), the applicant is also specialised in the manufacture of medical equipment.
TMSC, which is active in the development, manufacture and sale of medical equipment and the provision of related technical services, was, prior to its acquisition by the applicant, a wholly owned subsidiary of Toshiba Corporation (‘Toshiba’). Following that acquisition, TMSC was renamed ‘Canon Medical Systems Corporation’.
A.

Acquisition by the applicant of TMSC
At the beginning of 2016, Toshiba experienced significant financial difficulties. In particular, based on its earnings forecasts, Toshiba considered that it was at risk of having to report negative results to shareholders for the 2015 financial year (ended 31 March 2016). As no public company of similar size to Toshiba had ever reported negative results to shareholders in the recent past in Japan, it was difficult to predict the impact of such an event on Toshiba’s business performance, financial condition and market value.
As a result, Toshiba initiated an accelerated bidding process for the sale of TMSC.
As a first step, on 19 February 2016, Toshiba proposed a transaction structure to bidders, referred to as the ‘80/20’ proposal.
In the context of the bidding process, each bidder made proposals that took into account Toshiba’s financial situation. In its bid, the applicant proposed a new transactional structure to Toshiba. The rationale for that new structure was that the sale of TMSC would be recognised as a capital contribution in Toshiba’s accounts by 31 March 2016 at the latest, but that the applicant would not formally acquire control until it had obtained the necessary clearances from the relevant competition authorities.
As a result of the new transactional structure proposed by the applicant, according to Toshiba, TMSC would no longer be a subsidiary of Toshiba for the purposes of United States Generally Accepted Accounting Principles (‘United States GAAP’) (recital 13 of the contested decision).
According to Toshiba, after examining the feasibility and effects of each bidder’s proposal, it considered that the applicant’s proposal was the most competitive and the only one in which the transfer of the full purchase price was not subject to merger control clearances (recital 14 of the contested decision).
The applicant’s acquisition of TMSC was publicly announced on 17 March 2016. On the same day, the applicant announced that it had entered into a share transfer agreement with Toshiba to acquire TMSC from Toshiba, and Toshiba and TMSC announced that Toshiba had agreed to sell TMSC to the applicant and that TMSC was no longer a subsidiary of the Toshiba group.
Following the applicant’s proposal, TMSC converted its 134980060 common shares and created new classes of shares in order to implement the transaction structure.
On 15 March 2016, TMSC’s articles of association were amended to include the new share classes and additional shares.
Firstly, TMSC created three categories of shares:
–
Class A shares (voting shares),
–
Class B shares (non-voting shares), and
–
Class C shares (voting shares with a redemption option exercisable by TMSC).
Secondly, TMSC converted all of its common shares into Class C shares and created share options for the mandatory redemption of all Class C shares.
Thirdly, on 16 March 2016, TMSC converted the Class C shares and issued as consideration:
–
20 Class A shares,
–
1 Class B share, and
–
100 share options related to Class C shares.
The applicant’s offer consisted of a two-step transaction structure.
As a first step, on 17 March 2016, the applicant and Toshiba entered into a ‘Shares and Other Securities Transfer Agreement’, by which the applicant acquired the Class B non-voting share for 4930 Japanese yen (JPY) (approximately EUR 40) and 100 Class C voting share options of TMSC for JPY 665497806400 (approximately EUR 5280000000), the right to vote not being exercisable until the share options had been exercised. On the same day, MS Holding, a securitisation vehicle created specifically for the purpose of the transaction on 8 March 2016, and Toshiba entered into an ‘Excluded Share Transfer Agreement’, whereby MS Holding acquired the remaining 20 Class A voting shares of TMSC for JPY 98600 (approximately EUR 800). Those two transactions are jointly referred to as the ‘interim transaction’ in Commission Decision C(2019) 4559 final of 27 June 2019 imposing fines for failure to notify a concentration in breach of Article 4(1) of 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; ‘the contested decision’).
As a second step, on 19 December 2016, the applicant, after obtaining the last relevant merger clearance, exercised its 100 Class C share options to acquire the underlying voting shares of TMSC, while TMSC acquired the applicant’s Class B non-voting share for JPY 4930 (approximately EUR 40) and the remaining 20 Class A voting shares of MS Holding for JPY 36098600 (approximately EUR 300000). Those two transactions are jointly referred to in the contested decision as the ‘ultimate transaction’.
All of those transactions are referred to in the contested decision as a ‘concentration’.
B.

Pre-notification phase
On 11 March 2016, the applicant sent the European Commission a team allocation request in respect of its plan to acquire sole control of TMSC within the meaning of Article 3(1)(b) of 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
).
In an email dated 5 April 2016, the applicant sent the Commission the part of the Form CO relating to the structure of the proposed transaction as well as a short presentation describing the different stages of the transaction.
On 28 April 2016, the applicant submitted a first draft of the Form CO to the Commission. On 11 May 2016, the Commission sent the applicant several questions on the draft Form CO, including three on the structure of the transaction, to which the applicant replied on 27 May 2016.
C.

Notification and decision authorising the concentration
On 12 August 2016, the applicant notified the Commission, pursuant to Article 4 of Regulation No 139/2004, of the acquisition of sole control of TMSC by the acquisition of 100% of its shares, in accordance with the normal merger control procedure. The applicant clarified that the notification was to be understood as covering the entire concentration, namely, the interim transaction and the ultimate transaction.
In the context of the assessment of the concentration, the Commission’s investigation did not reveal any indications that might raise competition law concerns. It is for that reason that the Commission adopted a clearance decision on 19 September 2016 pursuant to Article 6(1)(b) of Regulation No 139/2004 and Article 57 of the Agreement on the European Economic Area (EEA).
D.

Administrative procedure and contested decision
On 18 March 2016, a few days after receiving the applicant’s team allocation request regarding its plan to acquire sole control of TMSC, the Commission was approached by an anonymous complainant.
On 11 May 2016, the Commission sent the applicant a request for information concerning the first draft of its notification form of 28 April 2016, in response to which the applicant submitted its observations.
On 29 July 2016, the Commission informed the applicant that it had opened an investigation which could lead to the imposition of fines under Article 14(2)(a) and (b) of Regulation No 139/2004 on account of possible breaches of the standstill obligation laid down in Article 7(1) of that regulation and the obligation to notify laid down in Article 4(1) of that regulation.
On 5 September 2016, the Commission received an additional submission from the applicant.
On 6 October 2016, a meeting was held between the Commission and the applicant.
By decision of 7 October 2016, adopted under Article 11(3) of Regulation No 139/2004, the Commission requested the applicant, TMSC and Toshiba to provide information and internal documents. The applicant and TMSC replied on 4 November 2016. Toshiba provided its replies between 4 November and 1 December 2016.
On 5 November 2016, the applicant sent a letter to the Commission concerning its observations on the meeting of 6 October 2016 and the decision of 7 October 2016.
Following emails from the Commission, Toshiba, TMSC and the applicant provided additional documents on 15 February, 24 February and 15 March 2017 respectively.
On 6 July 2017, pursuant to Article 18 of Regulation No 139/2004, the Commission sent the applicant a statement of objections, in which it reached the preliminary conclusion that the applicant had intentionally, or at least negligently, infringed Articles 4(1) and 7(1) of Regulation No 139/2004, and in which it stated that it was therefore considering the imposition of fines under Article 14(2) of that regulation.
On 15 March 2018, the applicant submitted written observations and requested a hearing.
On 3 May 2018 a hearing was held at which the applicant presented its arguments.
On 8 May 2018, the Commission sent the applicant an email containing questions which the applicant had been unable to answer during the hearing on 3 May 2018. The applicant submitted its responses on 24 May 2018.
On 11 June 2018, the Commission received additional information from the applicant. Furthermore, in response to the statement of objections, the applicant asked the Commission to close the infringement procedure in the light of the test set out by the Court of Justice in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
).
On 30 November 2018, the Commission issued a supplementary statement of objections, in which it reached the preliminary conclusion that the applicant’s conduct constituted an infringement of Articles 4(1) and 7(1) of Regulation No 139/2004, also on the basis of the interpretation of the legal framework set out in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
).
On 21 January 2019, the applicant submitted its responses to the supplementary statement of objections and requested a second hearing, which took place on 14 February 2019.
On 25 February 2019, the Commission sent the applicant an email containing questions which the applicant had been unable to answer during the hearing on 14 February 2019. The applicant submitted its responses on 13 March 2019.
On 3 April 2019, the applicant submitted to the Commission additional comments concerning the latter’s approach to the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
).
On 27 June 2019, the Commission adopted the contested decision.
The first four articles of the operative part of the contested decision are worded as follows:
‘Article 1
By failing to notify a concentration with a Union dimension prior to its implementation (on 17 March 2016) without express authorisation to do so by Article 7(2) of Regulation … No 139/2004 or by a decision taken pursuant to Article 7(3) of that regulation, [the applicant] has, at least negligently, breached Article 4(1) of that regulation.
Article 2
By implementing a concentration with a Union dimension (on 17 March 2016) before its clearance (on 19 September 2016), [the applicant] has, at least negligently, breached Article 7(1) of Regulation … No 139/2004.
Article 3
A fine of EUR 14000000 is hereby imposed on [the applicant] pursuant to Article 14(2)(a) of Regulation … No 139/2004 for the breach referred to in Article 1 of this decision.
Article 4
A fine of EUR 14000000 is hereby imposed on [the applicant] pursuant to Article 14(2)(b) of Regulation … No 139/2004 for the breach referred to in Article 2 of this decision.’
II.

Procedure and forms of order sought
By application lodged at the Court Registry on 9 September 2019, the applicant brought the present action.
On 27 November 2019, the Commission filed the statement of defence.
By document lodged at the Court Registry on 14 January 2020, the Council of the European Union sought leave to intervene in the present proceedings in support of the form of order sought by the Commission.
By decision of 5 March 2020, the President of the Sixth Chamber of the General Court granted that leave. The Council lodged the statement of intervention on 24 April 2020 and the main parties filed their observations on it within the prescribed time limits.
The main parties lodged the reply and rejoinder on 18 March and 26 June 2020 respectively.
By letter of 28 July 2020, the applicant submitted a request for a hearing under Article 106(2) of the Rules of Procedure of the General Court.
The applicant claims that the Court should:
–
annul the contested decision;
–
in the alternative, cancel or substantially reduce the fines imposed;
–
order the Commission to pay the costs.
The Commission contends that the Court should:
–
dismiss the action;
–
order the applicant to pay the costs.
The Council contends that the Court should reject in its entirety the plea of illegality raised in respect of Article 14(2)(a) and (b) of Regulation No 139/2004.
III.

Law
In support of its action, the applicant raises three pleas in law, the first alleging that it did not infringe Articles 4(1) and 7(1) of Regulation No 139/2004, the second alleging infringement of Article 14 of Regulation No 139/2004 and the third alleging infringement of Article 18 of Regulation No 139/2004 and Article 48(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’).
A.

The first plea in law, alleging that the applicant did not infringe Articles 4(1) and 7(1) of Regulation No 139/2004
As a preliminary point, it is important to note that, in recital 99 of the contested decision, the Commission summarises its approach to the finding of infringement of Articles 4(1) and 7(1) of Regulation No 139/2004 as follows:
‘…
a)
The Interim Transaction and the Ultimate Transaction together constituted a single concentration within the meaning of Article 3 of [Regulation No 139/2004] and the case-law of the Union Courts, consisting in the acquisition of control over TMSC by [the applicant] (see Section 4.1).
b)
As part of a single concentration, the Interim and the Ultimate Transactions were inherently closely connected. Indeed, the Interim Transaction was a necessary step to achieve a change in control over TMSC, presenting a direct functional link with the implementation of the acquisition of control by [the applicant] over TMSC. For those reasons, the Interim Transaction contributed (at least in part) to the change in control of TMSC within the meaning of the Ernst & Young judgment. By carrying out the Interim Transaction, [the applicant] partially implemented the single concentration consisting in the acquisition of control over TMSC by [it] (see Section 4.2).
c)
Because it partially implemented the Concentration consisting in the acquisition of control over TMSC prior to notification to and clearance by the Commission, [the applicant] breached Articles 4(1) and 7(1) of [Regulation No 139/2004] (see Section 4.3).’
The first plea in law is divided into four parts. The first part alleges that the interim transaction does not constitute an acquisition of control by the applicant. The second part alleges the absence of a partial implementation in breach of Article 4(1) and Article 7(1) of Regulation No 139/2004. The third part alleges manifest errors in the application of the concept of ‘partial implementation’ of a ‘single concentration’. The fourth part alleges that the
ex ante
merger control procedure was never circumvented.
1.

The first part, alleging that the interim transaction does not constitute an acquisition of control
In the context of the first part, the applicant claims that the interim transaction did not result in an acquisition of control by it and cannot, therefore, constitute an instance of the early implementation of a concentration.
That first part is divided into two subsections. In the context of the first subsection, the applicant claims that there is an early implementation of a concentration only in the event of an acquisition of control. In the context of the second subsection, the applicant claims that previous case-law confirms that the change of control is the only relevant criterion.
(a)

The first subsection, according to which the early implementation of a concentration requires the acquisition of control
The applicant claims that it follows from the wording of Articles 4(1) and 7(1) of Regulation No 139/2004 that there is early implementation of a concentration only where control is acquired. It is common ground that the concept of ‘concentration’ used in those provisions must be defined in the light of Article 3 of that regulation, according to which concentrations are acquisitions which lead to a lasting change in direct or indirect control. Furthermore, the applicant refers to paragraph 44 et seq. of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), according to which the early implementation of a concentration is closely linked to the concept of a concentration within the meaning of Article 3 of Regulation No 139/2004, which requires an acquisition of control, to paragraph 46 of that judgment, according to which only ‘operations contributing to a lasting change in the control of the target undertaking’ fall within the scope of Article 7(1) of that regulation, and to paragraphs 49 and 60 of that judgment, according to which transactions do not contribute to a lasting change of control when they do not have a ‘direct functional link with [the] implementation’ of the concentration, namely, when they do not ‘as such’ have a link with the change of control, that criterion excluding all transactions which have a ‘conditional link with the concentration’ in that they are ‘ancillary or preparatory’ to its implementation. In recital 134 of the contested decision, the Commission expressly acknowledges that the applicant did not acquire control over TMSC before the Commission’s clearance of 19 September 2016. Furthermore, the applicant refers to the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
), according to which the standstill obligation is intended to prevent the Commission from finding itself in a situation where an incompatibility decision would need to be supplemented by a dissolution decision designed to put an end to the acquisition of control that has taken place even before the Commission has taken a decision on its competitive effects, and concludes that its scope should not extend beyond what is necessary to ensure that the restructuring of undertakings does not lead to lasting harm to competition. Finally, the Commission’s investigation of the transaction was never jeopardised in any sense, given that the applicant acquired control over TMSC only after obtaining all the clearances from the relevant competition authorities, including that from the Commission.
The Commission contests the applicant’s arguments.
It is common ground between the parties that TMSC was not controlled by the applicant during the interim transaction.
It must therefore be determined whether, as the applicant maintains, there can only be an early implementation of a concentration if there is control of the target undertaking.
In that regard, it should be noted that a concentration within the meaning of Article 7(1) of Regulation No 139/2004 arises as soon as the merging parties implement operations contributing to a lasting change in the control of the target undertaking (judgments of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
, and of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
).
The fact that any partial implementation of a concentration falls within the scope of that article is thus in accordance with the requirement of ensuring effective control of concentrations. If the merging parties were prohibited from implementing a concentration by means of a single transaction, but it were open to them to achieve the same result by successive partial operations, that would reduce the efficiency of the prohibition in Article 7 of Regulation No 139/2004 and would thus put at risk the prior nature of the control required by that regulation and the pursuit of its objectives (judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
It is in the same vein that recital 20 of that regulation states that it is appropriate to treat as a single concentration transactions that are closely connected in that they are linked by condition or take the form of a series of transactions in securities taking place within a reasonably short period of time (judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
However, where such transactions, despite having been carried out in the context of a concentration, are not necessary to achieve a change of control of an undertaking concerned by that concentration, they do not fall within the scope of Article 7 of Regulation No 139/2004. Those transactions, although they may be ancillary or preparatory to the concentration, do not present a direct functional link with its implementation, so that their implementation is not, in principle, likely to undermine the efficiency of the control of concentrations (judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
Finally, the Court concluded that Article 7(1) of Regulation No 139/2004 must be interpreted as meaning that a concentration is implemented only by a transaction which, in whole or in part, in fact or in law, contributes to the change in control of the target undertaking (judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
Since Article 7(1) and Article 4(1) of Regulation No 139/2004 are two provisions concerning the concept of ‘implementation of a concentration’, it must be considered that what the Court of Justice, dealing with a reference for a preliminary ruling under Article 267 TFEU in the case which gave rise to the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), stated in relation to the first of those provisions is also true of the second.
The Commission is therefore right to argue that it follows from the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that the Court distinguished between the concepts of ‘concentration’ and ‘implementation of a concentration’.
In that regard, it follows from paragraph 45 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that, in accordance with Article 3 of Regulation No 139/2004 in which the concept of concentration is defined, a concentration is deemed to have been implemented ‘where a change of control on a lasting basis’ takes place, whereas it follows from paragraph 46 of that judgment that the ‘concentration’ may take place ‘as soon as the merging parties implement operations contributing to a lasting change in the control of the target undertaking’, namely, possibly before the acquisition of control of the target undertaking.
That conclusion is supported by paragraph 59 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), from which it follows that, for there to be a concentration within the meaning of Articles 4(1) and 7(1) of Regulation No 139/2004, it is sufficient for a transaction, in whole or in part, in fact or in law, to contribute to the change of control of the target undertaking.
Thus, it follows from the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that the concept of ‘implementation of a concentration’, as provided for in Articles 4(1) and 7(1) of Regulation No 139/2004, is not limited to the situation in which the ultimate purchaser acquires control of the target undertaking, but also covers any transaction which ‘contributes’ to such a change in control.
In that regard, the applicant’s argument that the Court, in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), excluded, in general terms, ‘all acts that have a “conditional link with the concentration” in the way that they are “ancillary or preparatory” for its implementation’ is wrong, since what the Court stated, in paragraph 49 of that judgment (see paragraph 64 above), is that transactions which were not necessary to achieve a change of control and which therefore, even if they could be ancillary or preparatory to the concentration, did not have a direct functional link with the implementation of the concentration did not fall within the scope of Article 7 of Regulation No 139/2004. It follows from that that the transactions fall within the concept of ‘implementation of a concentration’, even if that implementation is partial within the meaning of paragraphs 47 and 51 of that judgment, if they contribute, in whole or in part, to the change of control of the target undertaking.
Furthermore, the conclusion set out in paragraph 69 above cannot be called into question by the applicant’s argument in so far as it makes a literal interpretation of an extract from Article 4(1) of Regulation No 139/2004. The applicant refers to the situation in which concentrations must be notified ‘following … the acquisition of a controlling interest’. That regulation sets out in this paragraph various possible cases of acquisition of control and specifies when, depending on the case, the notification must take place. As the Commission points out, the reference to the ‘acquisition of a controlling interest’ may relate to situations governed by Article 7(2) of Regulation No 139/2004: even if not subject to the suspensory condition of merger clearance, the implementation of takeover bids and securities transactions could lead to the acquisition of a controlling interest without infringing Article 7(1) of Regulation No 139/2004, subject to compliance with the requirements set out in paragraph 2 of that provision. However, the applicant does not claim that the present case falls within the scope of Article 7(2) of that regulation.
Therefore, contrary to the applicant’s submission, the criterion used in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), to determine whether Article 7(1) of Regulation No 139/2004 has been infringed is not whether there has been an acquisition of control of the target undertaking, but, as the Commission maintains, whether the transaction in question contributed, in whole or in part, in fact or in law, to the change of control of that undertaking. Such a criterion is applicable, by analogy, in relation to Article 4(1) of Regulation No 139/2004.
As regards the applicant’s interpretation of the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
), according to which only transactions which require dissolution measures amount to acts which undermine the effectiveness of the merger control system, it must be noted that that interpretation is incorrect. What the General Court stated in that judgment is that, first, without an acquisition of control, the Commission did not have the power to dissolve a concentration (judgment of 6 July 2010, Aer Lingus Group v Commission,
T‑411/07
,
EU:T:2010:281
, paragraph
) and that, secondly, the acquisition of a shareholding which did not, as such, confer control within the meaning of Article 3 of Regulation No 139/2004 could fall within the scope of Article 7 of that regulation (judgment of 6 July 2010, Aer Lingus Group v Commission,
T‑411/07
,
EU:T:2010:281
, paragraph
). In other words, the Court stated that, while the acquisition of control was necessary for the Commission to exercise its power to dissolve the concentration, such acquisition of control was not necessary for a transaction to fall within the scope of Article 7 of Regulation No 139/2004.
Finally, as regards the applicant’s argument that the Commission’s investigation of the transaction was at no time jeopardised in any sense, since it acquired control over TMSC only after obtaining all the clearances of the competition authorities concerned, it is incorrect.
The applicant considers that ‘concentrations are defined as acquisitions resulting in a lasting change of direct or indirect control’ and, therefore, that as long as control is not acquired, there is no early implementation of the concentration.
Therefore, the applicant confuses the concepts of ‘implementation’ and ‘acquisition’, which are two distinct concepts in Regulation No 139/2004.
The term ‘implementation’ relates to the concentration (or transaction as referred to in Article 7(4) of Regulation No 139/2004) whereas the term ‘acquisition’ relates to control.
Those two terms cannot be confused. The ‘implementation’ of the concentration may be long term, which explains the notions of partial implementation and single concentration, whereas the ‘acquisition’ of control may not be long term. Either control is acquired, as soon as an entity has the possibility to exercise decisive influence over the target company, or it is not acquired. The notion of acquisition of control cannot therefore cover a ‘partial’ acquisition. Therefore, an alleged ‘partial control’ cannot be a condition for a partial implementation of the concentration, contrary to what the applicant maintains.
Therefore, in order to be effective, the Commission’s investigation must be carried out not only before the acquisition of control, but also before the implementation, even partial, of the concentration. As already noted in paragraph 62 above, if the merging parties were prohibited from implementing a concentration by means of a single transaction, but it were open to them to achieve the same result by successive partial operations, that would reduce the efficiency of the prohibition in Article 7 of Regulation No 139/2004 and would thus put at risk the prior nature of the control required by that regulation and the pursuit of its objectives (judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
Therefore, the first subsection of the first plea in law must be rejected.
(b)

The second subsection, according to which the previous case-law confirms that the change of control is the only relevant criterion
The applicant claims that the contested decision disregards the case-law of the Courts of the European Union.
Therefore, firstly, the applicant refers to paragraph 25 of the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
), according to which a concentration is implemented only when one undertaking acquires control of another, that is to say, the possibility of exercising decisive influence, and to paragraph 85 of that judgment, according to which, in the absence of the acquisition of actual control, the participation at issue cannot be equated with a concentration which has already been implemented. Secondly, the applicant claims that, in the judgment of 13 September 2010, Éditions Odile Jacob v Commission (
T‑279/04
, not published,
EU:T:2010:384
), the General Court accepted a parking structure because no control had been transferred before clearance was granted. The Court confirmed in that judgment that the transfer of shares to a company formed for the sole purpose of receiving them does not lead to an acquisition of control by the ultimate acquirer and therefore falls outside the scope of Article 7(1) of Regulation No 139/2004. Thirdly, according to the applicant, in the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), the Court rejected, in paragraph 148 et seq. of that judgment, relating to recital 20 of Regulation No 139/2004, the idea that, in the event of the early implementation of a concentration, two transactions should be classified as a ‘single concentration’ solely on the ground that they are closely related. In that respect, it follows from paragraph 44 of the judgment of 4 March 2020, Marine Harvest v Commission (
C‑10/18 P
,
EU:C:2020:149
), that recital 20 of Regulation No 139/2004 does not constitute a legal basis for concluding that a ‘single concentration’ exists. The position expressed by the Commission in its defence that a ‘single economic project’ of two transactions can lead to a ‘single concentration’ should therefore be rejected. In addition, the applicant refers to paragraph 128 of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), according to which the relevant test is the time at which the acquisition of control took place. Furthermore, the applicant claims that the concept of a ‘single concentration’ cannot be relied on to establish the early implementation of a concentration and points out that the Court stated, in paragraph 151 of that judgment, that where those transactions, taken together, are not sufficient to transfer control of the target undertaking, it makes ‘no sense’ to describe them as a single concentration. Finally, the Commission itself argued in paragraph 105 of Commission Decision C(2014) 5089 final of 23 July 2014 imposing a fine for the implementation of a concentration in violation of Articles 4(1) and 7(1) of Regulation No 139/2004 (Case COMP/M.7184 – Marine Harvest/Morpol), that the question of whether those two steps were part of the same transaction, namely, the existence of a ‘single concentration’, was ‘irrelevant’ under Article 7(1) of Regulation No 139/2004.
The Commission contests the applicant’s arguments.
Firstly, it should be noted that paragraph 25 of the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
), does not concern the position of the Court, but relates the reasoning of the Commission in the decision in that case. As to paragraph 85 of that judgment, while the Court did state that, in the absence of an actual acquisition of control, the disputed shareholding in that case could not ‘be assimilated to a “concentration” which has “already been implemented”’, it cannot be inferred from that statement that a concentration cannot be partially implemented by a transaction contributing to a change of control.
Furthermore, as noted in paragraph 74 above, the Court stated in the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
, paragraph
), that the acquisition of a shareholding which did not, as such, confer control within the meaning of Article 3 of Regulation No 139/2004 could fall within the scope of Article 7 of that regulation. It thus follows from that judgment of the Court, delivered prior to the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that the implementation of a concentration should not necessarily be interpreted as an acquisition of control.
Consequently, the judgment of 6 July 2010, Aer Lingus Group v Commission (
T‑411/07
,
EU:T:2010:281
), does not preclude the prohibition laid down in Article 7(1) of Regulation No 139/2004 from also covering partial implementation, that is to say, transactions which do not, as such, transfer control.
Secondly, as regards the judgment of 13 September 2010, Éditions Odile Jacob v Commission (
T‑279/04
, not published,
EU:T:2010:384
), the conclusion drawn by the applicant, namely, that the parking of shares in a company set up for the sole purpose of holding them did not lead to an acquisition of control by the ultimate purchaser and therefore does not fall within the scope of Article 7(1) of Regulation No 139/2004, must be rectified by putting it into context.
First, the case which gave rise to the judgment of 13 September 2010, Éditions Odile Jacob v Commission (
T‑279/04
, not published,
EU:T:2010:384
), and the present case are not fully comparable. In the case which gave rise to the judgment of 13 September 2010, Éditions Odile Jacob v Commission (
T‑279/04
, not published,
EU:T:2010:384
), the applicant disputed that the parking structure fell within the scope of Article 3(5)(a) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (
OJ 1989 L 395, p. 1
), whereas, in the present case, the applicant does not claim that the parking structure at issue falls within such an exception.
Since the two structures are different, the conclusions drawn with regard to the first cannot be generally extended to the second.
Secondly, in the case which gave rise to the judgment of 13 September 2010, Éditions Odile Jacob v Commission (
T‑279/04
, not published,
EU:T:2010:384
), as the Commission pointed out in paragraph 175 of the contested decision, and as the Court of Justice, hearing the appeal, had noted, the applicant’s action in that case sought solely the annulment of the contested decision by which the Commission had declared the concentration at issue compatible with the common market (judgment of 6 November 2012, Éditions Odile Jacob v Commission,
C‑551/10 P
EU:C:2012:681
, paragraph
). The issue at stake thus concerned the legality of the Commission’s decision authorising the concentration, and not the question of the early implementation of concentrations by means of a parking structure. For that reason, the Court of Justice noted that, in order for the General Court to rule on the legality of the contested decision, it was not necessary to examine the question whether Lagardère SCA had acquired sole or joint control with NBP Bank of the target assets, through the parking transaction at issue, and that the findings of the General Court on that question were therefore to be regarded as superfluous (judgment of 6 November 2012, Éditions Odile Jacob v Commission,
C‑551/10 P
,
EU:C:2012:681
, paragraph
).
Furthermore, in any event, in its action before the General Court, the applicant in that case argued that the holding of the target assets gave the ultimate purchaser, as soon as they were acquired by the holding company, the possibility of exercising decisive influence over the business connected with those assets, in that that holding gave the ultimate purchaser, in respect of all or part of the target assets, rights of ownership or use within the meaning of Article 3(3)(a) of Regulation No 4064/89, as amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (
OJ 1997 L 180, p. 1
) (judgment of 13 September 2010, Éditions Odile Jacob v Commission,
T‑279/04
, not published,
EU:T:2010:384
, paragraph
).
The applicant in that case had thus isolated the transaction leading to the acquisition of the target assets by the holding company and argued that that company had already led to an acquisition of control.
In that context, the Court stated that, since the holding of the target assets could not, in that case, be regarded as a concentration within the meaning of Article 3(1)(b) of Regulation No 4064/89, the prohibition on the parties to such a transaction, by Article 7(1) of Regulation No 4064/89, from implementing it before it was notified and declared compatible with the common market could not therefore have been infringed (judgment of 13 September 2010, Éditions Odile Jacob v Commission,
T‑279/04
, not published,
EU:T:2010:384
, paragraph
).
That statement by the Court was thus only made in response to the applicant’s allegation that the merger clearance decision was invalid, inter alia, because the ultimate purchaser, by means of a parking transaction, acquired either sole or joint control of the target assets as soon as they were acquired by the holding company (indirectly but wholly owned by NBP Bank), without prior notification of the concentration.
The Court therefore did not consider whether the acquisition of the target assets by the holding company constituted, as in the present case, the partial implementation of a single concentration, but whether that acquisition, carried out within the framework of a parking structure, had, as such, transferred control to the purchaser.
Third, as regards the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), at the outset, it should be noted that the main parties are in dispute as to what criterion was used in the contested decision to characterise the early implementation of a concentration.
The applicant considers that the Commission, in the contested decision, found that it was sufficient to establish that the interim and ultimate transactions constituted a single concentration, whereas the appropriate test would have been to assess whether the interim transaction enabled it to acquire control of TMSC.
In that regard, it should be noted that, as is apparent from recital 99 of the contested decision (see paragraph 53 above), the Commission did not consider it sufficient to establish that the interim transaction and the ultimate transaction constituted a single concentration, but noted, firstly, that the interim transaction and the ultimate transaction together constituted a single concentration, secondly, that the interim transaction had contributed in part to the change of control of TMSC within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), and that, by proceeding with that interim transaction, the applicant had partially completed the single concentration consisting of the acquisition of control of TMSC by the applicant and, thirdly, that that partial implementation, prior to the notification to the Commission, had infringed Articles 4(1) and 7(1) of Regulation No 139/2004.
As regards the applicant’s reference to paragraph 148 et seq. of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), contrary to the applicant’s contention, the General Court did not reject the idea that, in the event of the early implementation of a concentration, two transactions should be classified as a ‘single concentration’ solely on the ground that they were closely related, since it merely stated that Regulation No 139/2004 did not provide an exhaustive definition of the conditions under which two transactions constituted a single concentration (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
). As regards paragraph 44 of the judgment of 4 March 2020, Marine Harvest v Commission (
C‑10/18 P
,
EU:C:2020:149
), to which the applicant also refers, the Court of Justice simply states that it cannot validly be inferred from the mere wording of recital 20 of Regulation No 139/2004 that the concept of a ‘single concentration’ cannot be interpreted in accordance with the provisions of that regulation. It cannot therefore be inferred from that paragraph that, in that judgment, the Court of Justice rejects the Commission’s approach that a ‘single economic project’ of two transactions can lead to a ‘single concentration’.
Thus, as the Commission points out, neither the General Court nor the Court of Justice questioned the fact that two transactions could lead to a single transaction.
In that regard, without being contradicted by the Court of Justice, the General Court noted, in paragraph 90 of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), that the Commission had, in several decisions, relied on the concept of a ‘single concentration’ and that the General Court had endorsed that concept, inter alia, in the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
).
As regards the reference to paragraph 128 of the judgment of 26 October 2017, Marine Harvest (
T‑704/14
,
EU:T:2017:753
), it should be pointed out that that case concerned the application of Article 7(2) of Regulation No 139/2004 to a series of transactions, where it was not disputed that control of the target undertaking had already been acquired in the first transaction. It was therefore in that context that the Court concluded that, where the acquisition of de facto sole control of the target undertaking took place by means of a single first transaction, the subsequent transactions by which the acquirer obtained additional shares in that undertaking were no longer relevant to the acquisition of control (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
). Therefore, that conclusion cannot have the consequence that early implementation can only take place in the event of a change of control at the time of the first transaction in the context of a single concentration such as in the present case.
As regards the reference to paragraph 151 of the judgment of 26 October 2017, Marine Harvest (
T‑704/14
,
EU:T:2017:753
), it should be noted that the quotation produced by the applicant is inaccurate, since it is incomplete. It would make ‘no sense’ in that paragraph, according to the Court, to consider that all transactions which are subject to a conditional link or take the form of a series of securities transactions carried out within a reasonably short period of time should be treated as a single concentration, even where those transactions, taken together, would not be sufficient in order to transfer control of the target undertaking (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
). Therefore, by that paragraph, the Court simply emphasised that only transactions which, taken together, transfer control can constitute a ‘single concentration’.
In the present case, in the contested decision, the Commission does not maintain that the interim transaction alone was sufficient to transfer control of TMSC to the applicant. In the contested decision, the Commission concluded that it was the ultimate transaction, which constituted a single concentration together with the interim transaction, which transferred control of TMSC to the applicant.
Finally, the applicant’s argument referring to the Commission’s position expressed in paragraph 105 of the decision in the
Marine Harvest
v
Morpol
case is inoperative, since that case did not involve the acquisition of a target undertaking by means of a parking structure as in the present case, but a situation in which the Commission had concluded that Marine Harvest ASA had acquired control of Morpol ASA through a single purchase of 48.5% of Morpol’s shares, and not through multiple partial transactions involving assets ultimately constituting a single economic entity (judgment of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
).
It follows from all the foregoing that the second subsection of the first plea in law must be rejected, as must the first part of that plea in law in its entirety.
2.

The second plea in law, alleging lack of partial implementation in breach of Articles 4(1) and 7(1) of Regulation No 139/2004
It should be noted that, in Section 4.1 of the contested decision, the Commission concluded that the interim and ultimate transactions together constituted a single concentration, as ‘they form part of a single economic project through which [the applicant] acquired control over TMSC form Toshiba’ (recital 101 of the contested decision). In reaching that conclusion, the Commission relied on three elements. Firstly, the interim transaction was only carried out in view of the ultimate transaction (Section 4.1.1 of the contested decision). Secondly, the sole purpose of MS Holding was to facilitate the acquisition of control of TMSC by the applicant (Section 4.1.2). Thirdly, the applicant was the only party able to determine the identity of the ultimate purchaser of TMSC and assumed the economic risk of the entire transaction from the time of the interim transaction (Section 4.1.3).
As a preliminary point, it should be noted that it is immaterial whether the acquisition, direct or indirect, of control of one or more undertakings was effected in one or more stages by means of one or more transactions, provided that the result achieved constitutes a single concentration (see, to that effect, judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
).
It is also immaterial whether the parties, when notifying a concentration to the Commission, plan to enter into two or more transactions or whether they have already entered into such transactions prior to notification. It is for the Commission, in any event, to assess whether those transactions have a unitary character such that they constitute a single concentration within the meaning of Article 3 of Regulation No 139/2004 (judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
).
Such an approach seeks to identify, in accordance with circumstances of fact and of law specific to each case and with a concern to ascertain the economic reality underlying the transactions, the economic aim pursued by the parties, by examining, when faced with a number of legally distinct transactions, whether the undertakings concerned would have been inclined to conclude each transaction in isolation or whether, on the contrary, each transaction constitutes only an element of a more complex operation, without which it would not have been concluded by the parties (judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
).
In other words, in order to determine the unitary nature of the transactions in question, it is necessary, in each individual case, to ascertain whether those transactions are interdependent, in such a way that one transaction would not have been carried out without the other (judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
).
That approach is intended, first, to ensure that undertakings notifying a concentration benefit from legal certainty for all the transactions which implement that concentration and, secondly, to enable the Commission to exercise effective control over concentrations which are likely to significantly impede effective competition in the common market or in a substantial part of it. Those two aims are, moreover, the main objective of Regulation No 139/2004 (see judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
and the case-law cited).
It follows that a concentration, within the meaning of Article 3(1) of Regulation No 139/2004, may be deemed to arise even in the case of a number of formally distinct legal transactions, provided that those transactions are interdependent in such a way that none of them would be carried out without the others and that the result consists in conferring on one or more undertakings direct or indirect economic control over the activities of one or more other undertakings (judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
, paragraph
).
It is in particular in the light of that case-law that the five complaints put forward by the applicant in the form of five subsections must be examined, according to which, firstly, the fact that ‘the interim transaction was only undertaken in view of the ultimate transaction’ is irrelevant and is not established to the requisite legal standard by the Commission, secondly, the sole purpose of MS Holding was not to ‘facilitate the acquisition by the applicant of control of TMSC’, thirdly, the alleged power to determine the identity of the ultimate purchaser and the economic risks is irrelevant, fourthly, the conditions for ‘partial implementation’ within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), are not fulfilled and, fifthly, the interim transaction did not ‘contribute to a lasting change of control’ over TMSC within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
).
...
(d)

The fourth subsection, according to which the conditions of ‘partial implementation’ within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), are not fulfilled
The applicant claims that, while in paragraph 47 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), the Court recognised that, in certain circumstances, a ‘partial implementation’ could constitute an early implementation of a concentration, such a ‘partial implementation’ can only exist in the event of an acquisition of ‘partial control’. That would mean that the acquirer has been given some influence over the strategic decision-making of the target. The applicant did not have any special rights that could have given it such influence over the target before clearance was obtained. Furthermore, since the Court stated in paragraph 46 of that judgment that there is an infringement of Article 7(1) of Regulation No 139/2004 only where the parties carry out transactions which contribute to a lasting change of control over the target undertaking, ‘control’ constitutes the essential element, even in the case of partial implementation. Finally, it follows from paragraph 61 of the abovementioned judgment, in which the Court held that the preparatory measure at issue had not contributed to the acquisition of control because the acquirers had not had the possibility of exercising ‘any influence’ over the target, that, if an acquirer has acquired ‘no influence’, there is no partial implementation.
The Commission contests the applicant’s arguments.
As regards the applicant’s argument that it follows from paragraph 47 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that a ‘partial implementation’ of a concentration can exist only in the event of an acquisition of ‘partial control’, it is incorrect.
According to paragraph 47 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), any partial implementation of a concentration falls within the scope of Article 7(1) of Regulation No 139/2004.
As noted in paragraph 73 above, it follows from the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that the test for determining whether Articles 4(1) and 7(1) of Regulation No 139/2004 have been infringed is not whether there has been an acquisition of control, including therefore ‘partial control’, over the target undertaking, but, as the Commission maintains, whether the transaction at issue has contributed to a change in control of that undertaking.
As regards the applicant’s argument that it follows from paragraph 46 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that ‘control’ is the ‘essential’ element, that is also incorrect.
According to paragraph 46 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), the implementation of a concentration takes place as soon as the parties to a concentration implement transactions contributing to a lasting change of control over the target undertaking.
Furthermore, it follows from paragraph 59 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), (see paragraph 65 above) that a concentration may be effected by a transaction which, in whole or in part, in fact or in law, contributes to a change of control of the target undertaking.
Therefore, as the Commission argues, if transactions ‘contribute’ to a change of control within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), including transactions that do not, on their own, transfer control, they constitute a partial implementation of a concentration.
As regards the applicant’s argument that it follows from paragraph 61 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that, if a purchaser has acquired ‘no influence’, there is no partial implementation, it should be noted that, while the Court considered that the measure at issue in that case did not fall within the scope of Article 7(1) of Regulation No 139/2004, because, among other reasons, it did not give the undertaking concerned ‘any influence’ over the target companies, the applicant had some influence in the present case, since, as the Commission points out in recital 157 of the contested decision and as already noted (see paragraphs 195 and 208 above), from the date of the interim transaction, and irrespective of the outcome of the merger clearance, the applicant had sole power to determine the identity of the ultimate purchaser of TMSC. Had it been prevented from acquiring it itself, the applicant could still have decided on the identity of the ultimate purchaser. The Commission was therefore right to state, in recital 155 of the contested decision, that the applicant had acquired the possibility of exercising a certain degree of influence over TMSC as a result of the interim transaction.
The fourth subsection must therefore be rejected.
(e)

The fifth subsection, according to which the interim transaction did not ‘contribute to a lasting change of control’ over TMSC within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
)
The applicant considers that the Commission’s reasoning in recital 143 of the contested decision, according to which the interim transaction was necessary to bring about a change in control of TMSC, in the sense that that transaction had a direct functional link with the implementation of the concentration, and according to which that means that the interim transaction contributed – at least in part – to a change in the control of the target undertaking within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), is wrong for several reasons.
(1)

The direct functional link criterion within the meaning of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
)
The applicant claims that the ‘direct functional link’ required by the Court in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), in order to establish the existence of an early implementation of a concentration exists only if the act itself brings about the change of control. The applicant points out that, according to recital 134 of the contested decision, it did not exercise control over TMSC. In that judgment, the Court ruled out the existence of a breach of the standstill obligation where the acquirer did not acquire the possibility of exercising ‘any influence’ over the target. Furthermore, it is clear from paragraphs 48 and 49 of that judgment that even consecutive transactions forming part of a single concentration do not constitute an early implementation of a concentration if the first transaction is not ‘necessary’ to achieve a change of control, but is only ‘ancillary’ or ‘preparatory’. In the present case, the transfer of shares to MS Holding was not necessary for the applicant to acquire control of TMSC.
The Commission contests the applicant’s arguments.
As already noted in paragraph 73 above, the test used in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), to determine whether Articles 4(1) and 7(1) of Regulation No 139/2004 have been infringed is not whether there has been an acquisition of control of the target undertaking, but whether the transaction in question has contributed, in whole or in part, in fact or in law, to the change of control of that undertaking.
Therefore, the fact, highlighted in recital 134 of the contested decision and referred to by the applicant, that the latter did not exercise control over TMSC during the interim period does not mean that that interim transaction did not contribute, in whole or in part, to the change of control of the target undertaking (see, to that effect, judgment of 31 May 2018, Ernst & Young,
C‑633/16
,
EU:C:2018:371
, paragraph
).
It is therefore necessary to reject the applicant’s argument that the ‘direct functional link’ allegedly required by the Court in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), in order to hold that an early implementation of a concentration exists only if the act itself brings about the change of control.
According to paragraph 49 of the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), transactions which are not necessary to achieve a change of control, in that they do not have a direct functional link with the implementation of a concentration, do not satisfy the criterion of contributing to a change of control and therefore do not infringe Articles 4(1) and 7(1) of Regulation No 139/2004 when carried out prior to notification and clearance of the concentration.
In the present case, contrary to the applicant’s submission, and as stated in recital 149 of the contested decision, the interim transaction was necessary because, firstly, 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, as Toshiba would have had to wait for clearance from the competition authorities to sell TMSC. Secondly, under the two-step structure, the interim transaction was a necessary step to achieve a change of control of TMSC. The objective of the two-step structure was for the interim transaction to allow an interim buyer to purchase all the voting securities of TMSC, but without the need to meet the notification requirements, and to allow the applicant to pay the price for TMSC to Toshiba in an irreversible manner while obtaining the greatest certainty that it would ultimately acquire control of TMSC. Thirdly, none of the hypothetical alternative transaction structures could satisfy the need for Toshiba to receive a significant amount of capital contribution before 31 March 2016.
Furthermore, as the Commission points out in recital 154 of the contested decision, the Court, in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), did not characterise the ‘direct functional link’ as a requirement distinct from that of a contribution to a change of control which must be met in order for a transaction to be covered by Article 7(1) of Regulation No 139/2004. The criterion used in that judgment is whether the transaction in question contributed, in whole or in part, in fact or in law, to the change of control of the target undertaking (see paragraph 73 above).
Finally, in recital 154 of the contested decision, the Commission quotes the applicant’s observations following the statement of objections, in which the applicant itself states that ‘the establishment of MS Holding was … necessary for the divestment of TMSC by Toshiba, in light of Toshiba’s financial situation’.
By that reply, the applicant must be regarded as having itself admitted that the interim transaction had a ‘direct functional link’ with the change of control of TMSC.
...
3.

The third part, alleging manifest errors in the application of the concept of ‘partial implementation of a “single concentration”’
First of all, the applicant intends to highlight the context in which the contested decision was taken. According to the applicant, the Commission cannot rely on the concept of a ‘single concentration’ to establish the existence of an infringement of Articles 4(1) and 7(1) of Regulation No 139/2004. The Commission confuses two different concepts, namely, on the one hand, the concept of a single concentration, which concerns the question of jurisdiction and makes it possible to determine whether two different transactions must be notified jointly to the Commission, that is to say, in particular, to ascertain whether the turnover of the two transactions must be combined in the context of calculating the notification thresholds, and, on the other hand, the concept of a concentration in the context of the alleged early implementation of a concentration in breach of Article 4(1) and Article 7(1) of Regulation No 139/2004. The applicant adds that it is because the Commission has found no evidence that the applicant controlled TMSC from the interim transaction that it developed a novel and unprecedented theory of ‘partial implementation of a single concentration’. In that way, the Commission intends, in an abusive manner, to establish a new rule prohibiting so-called parking structures, even when they do not lead to an acquisition of control prior to clearance.
The Commission contests the applicant’s arguments.
As regards the applicant’s argument that the concept of a single concentration concerns only the question of the Commission’s competence, depending on whether or not certain thresholds are met, but not the question of the possible infringement of Articles 4(1) and 7(1) of Regulation No 139/2004, it is sufficient to note that the Court has had occasion to observe that arguments which would lead to the inclusion of transactions in the concept of a single concentration would de facto lead to their inclusion in the scope of Article 7 of Regulation No 139/2004 (see, to that effect, judgment of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
). Thus, whatever falls within the concept of a ‘single concentration’ falls within the scope of Article 7 of Regulation No 139/2004 and therefore, logically, within that of Article 4 of that regulation.
As to the applicant’s argument that the Commission intended to establish a new rule prohibiting so-called parking structures, even where they do not lead to an acquisition of control prior to clearance, that assertion must be qualified.
As already noted in paragraph 73 above, it follows from the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
), that, in order to determine whether Articles 4(1) and 7(1) of Regulation No 139/2004 have been infringed, it is not essential that there has been an acquisition of control of the target undertaking. It may be sufficient that the transaction in question contributed, in whole or in part, in fact or in law, to the change of control of that undertaking.
However, it is true that that is the first time that the Commission has found a breach of the notification and standstill obligations in the context of a single concentration involving a parking structure.
In support of its third part, the applicant develops its argument around three points.
(a)

The argument that the concept of a ‘single concentration’ cannot be based on recital 20 of Regulation No 139/2004
According to recital 20,
in fine
, of Regulation No 139/2004, it is appropriate ‘to treat as a single concentration transactions that are closely connected in that they are linked by condition or take the form of a series of transactions in securities taking place within a reasonably short period of time’.
The applicant claims that the Commission failed to prove, in the contested decision, that there was a conditional link between the interim and ultimate transactions. If the necessary clearance in the control procedure had not been obtained, the applicant would have been able to find a third party buyer for the share options. Furthermore, according to the applicant, the Commission’s conclusion in the contested decision as to the existence of a single concentration cannot be based on recital 20 of Regulation No 139/2004, as found both by the General Court in the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), and by the Court of Justice in the judgment of 4 March 2020, Marine Harvest v Commission (
C‑10/18 P
,
EU:C:2020:149
). The applicant further points out that, in paragraph 126 of its judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), the General Court stated that it cannot be inferred from the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
), that, whenever several transactions are interdependent, they necessarily constitute a single concentration. Finally, the applicant points out that, according to recital 20 of Regulation No 139/2004, the concept of a single concentration is relevant only in two situations: where two transactions are subject to a conditional link and where they are carried out within a reasonably short period. The present case does not correspond to either of those two situations. Those two acquisitions were not made within a reasonably short period of time, since it is only nine months after the interim transaction that the applicant was able to exercise its share options.
The Commission contests the applicant’s arguments.
As regards the applicant’s argument that the Commission did not provide evidence in the contested decision of the existence of a conditional link between the interim and ultimate transactions, it is sufficient to note that it is incorrect, as was found in paragraphs 228 to 235 above.
In that regard, the fact that it was not absolutely certain that the competition authorities would give the necessary clearance cannot undermine that finding.
Apart from the fact that, as the applicant itself states, the likelihood of obtaining clearance was high, a refusal by the competition authorities would not have led to the termination of the transaction. The price for TMSC was irreversibly paid by the applicant to Toshiba, which was able to enter it in its accounts in good time. It is therefore irrelevant whether the applicant is the ultimate acquirer of TMSC or whether it should have sold it to a third party purchaser of its choice.
As regards the applicant’s argument that the Commission could not base its conclusion, in the contested decision, of the existence of a single concentration on recital 20 of Regulation No 139/2004, it is true that, as the General Court noted in paragraph 91 of the judgment of26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), the concept of a ‘single concentration’ appears only in recital 20 of Regulation No 139/2004 and not in the articles of that regulation (judgment of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
).
In paragraph 150 of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), the Court held that that recital did not contain an exhaustive definition of the circumstances in which two transactions constitute a single concentration. It relied in this respect on the specific nature of that recital, which, although it may cast light on the interpretation to be given to a legal rule, cannot, since it has no binding legal force of its own, constitute such a rule (judgment of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
).
While recital 20 of Regulation No 139/2004 may serve as a basis for interpreting the provisions of that regulation, it cannot reasonably infer from the wording of that recital alone an interpretation of the concept of a ‘single concentration’ which is not consistent with those provisions. To that effect, the Court has moreover had occasion to state, on several occasions, that the preamble to an EU act has no binding legal force and cannot be validly relied on either as a ground for derogating from the actual provisions of the act in question or for interpreting those provisions in a manner clearly contrary to their wording (judgment of 4 March 2020, Marine Harvest v Commission,
C‑10/18 P
,
EU:C:2020:149
, paragraph
).
In the present case, it must be noted that the Commission did not base the contested decision solely on recital 20 of Regulation No 139/2004, but on Article 3 of Regulation No 139/2004, interpreted in the light of that recital.
As regards the applicant’s argument based on paragraph 126 of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), it is correct that the Court stated there, in response to an argument of the applicant in that case, based on the concept of the conditional link as referred to in recital 20 of Regulation No 139/2004, that it cannot be inferred from paragraph 107 of the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission,
T‑282/02
,
EU:T:2006:64
), according to which, in order to determine the unitary nature of the transactions at issue, it is necessary, in each individual case, to assess whether those transactions are interdependent in such a way that one would not have been carried out without the other, that, whenever several transactions are interdependent, they necessarily constitute a single concentration.
However, it should be noted that the circumstances of that case differ from the present case.
That case concerned the acquisition of the Norwegian salmon producer and processor Morpol. In a first step, the acquirer entered into a share purchase agreement by which it acquired, without prior notification, 48.5% of the share capital of Morpol. In a second step, it acquired the remaining shares by launching a mandatory public tender offer for them.
The Court found that, in that case, there had already been an acquisition of control upon the conclusion of the share purchase agreement (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
).
Therefore, the Court concluded that it cannot be inferred from the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
), that, in a situation in which the acquisition of control of a single target undertaking has taken place by means of a single transaction, it is necessary to consider that transaction as part of a single concentration, where the share buy-back that led to the acquisition of control and a subsequent mandatory takeover bid are interdependent (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
).
Therefore, as the Commission points out, the limitation provided for in paragraph 126 of the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
), was merely intended to exclude the specific situation described in paragraph 133 of that judgment and not to reject the concept of a single concentration.
Moreover, the Court has noted that the Commission has, in several decisions, relied on the concept of a ‘single concentration’ (judgment of 26 October 2017, Marine Harvest v Commission,
T‑704/14
,
EU:T:2017:753
, paragraph
), and it endorsed that concept, inter alia, in the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
).
Finally, it should be pointed out that the Court, in its judgment of 4 March 2020, Marine Harvest v Commission (
C‑10/18 P
,
EU:C:2020:149
), dismissed the appeal against the judgment of 26 October 2017, Marine Harvest v Commission (
T‑704/14
,
EU:T:2017:753
).
(b)

The argument that paragraph 35 of the CJN provides an insufficient basis for the Commission’s concepts of ‘single concentration’ and ‘partial implementation’
(1)

The argument that the CJN is not a sufficient legal basis and is not legally binding
First, the applicant submits that the CJN is not the appropriate legal basis for the early implementation of a concentration, since it does not address the question of when a concentration is implemented within the meaning of Article 7(1) of Regulation No 139/2004. Even if it were possible to characterise ‘parking transactions’ within the meaning of paragraph 35 of the CJN as a ‘single concentration’, that paragraph of the CJN would not imply that a ‘partial implementation’ of a ‘parking structure’ constitutes an infringement of Article 4(1) [or] Article 7(1) of Regulation No 139/2004. Secondly, the applicant submits that where the CJN departs from Regulation No 139/2004 and the relevant case-law, it is not binding on the parties.
The Commission contests the applicant’s arguments.
As regards the applicant’s argument that the CJN is not a sufficient legal basis, it should be noted that, in recital 75 of the contested decision, the Commission stated that, in order to determine whether several transactions form part of a single concentration, it is necessary to focus on ‘the economic aim pursued by the parties’, in accordance with the judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
, paragraph
) (see paragraph 111 above).
Moreover, in recital 99(b) of the contested decision, the Commission considered that ‘the interim transaction [had] contributed (at least in part) to the change in control of TMSC within the meaning of the judgment [of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
)] [; b]y carrying out the interim transaction, [the applicant] partially implemented the single concentration consisting in its acquisition of control over TMSC by [the applicant]’.
Finally, in recital 101 of the contested decision, the Commission explained that it considered that the interim and ultimate transactions constituted a single concentration within the meaning of Article 3 of Regulation No 139/2004 and the case-law of the Courts of the European Union, since, although legally distinct, they formed part of a single economic project by which the applicant acquired control of TMSC from Toshiba. In that recital, the Commission added that the successive transactions between Toshiba, MS Holding and the applicant closely corresponded to the type of single merger transaction structure described in paragraph 35 of the CJN.
Therefore, in the contested decision, the Commission applied the concept of a single concentration as interpreted by the Court in its judgment of 23 February 2006, Cementbouw Handel & Industrie v Commission (
T‑282/02
,
EU:T:2006:64
), and considered that the interim transaction had given rise to a partial implementation of a single concentration on the basis of Articles 4(1) and 7(1) of Regulation No 139/2004, as interpreted by the Court of Justice in the judgment of 31 May 2018, Ernst & Young (
C‑633/16
,
EU:C:2018:371
). Only in the alternative did the Commission refer to paragraph 35 of the CJN.
The applicant is therefore wrong to argue that the CJN is the legal basis for the contested decision.
As regards the applicant’s argument that the CJN is not legally binding on it, as has been noted, the contested decision is not based on the CJN. Nor is it based on the other paragraphs of the CJN.
The applicant’s argument that the CJN does not constitute a sufficient legal basis and is not legally binding must therefore be rejected.
(2)

The argument that the conditions of paragraph 35 of the CJN are not fulfilled
The applicant submits that, assuming that paragraph 35 of the CJN is applicable to the present case, the conditions of a ‘parking arrangement’ are not fulfilled, since, first, according to that paragraph, the ‘interim buyer generally acquires shares “on behalf of” the ultimate acquirer’, whereas MS Holding did not acquire TMSC ‘on behalf of’ the applicant, and secondly, there was no ‘direct link’ or ‘agreement on the future onward sale’ between the ‘first buyer’ and the ‘ultimate acquirer’. In that respect, the applicant submits that MS Holding was entitled to exercise all voting rights in TMSC and that the directors of MS Holding had the right to transfer their shares, as they could transfer Class A shares without the approval of the applicant. A hypothetical transfer of Class A shares by the directors of MS Holding would have required only the approval of the directors of TMSC and MS Holding could easily have obtained that approval because of its power to remove or replace the entire board of directors of TMSC.
The Commission contests the applicant’s arguments.
It should be noted that paragraph 35 of the CJN referred to, as noted (see paragraphs 332 and 334 above), in the alternative in the contested decision does not constitute the legal basis for the contested decision.
Accordingly, the applicant’s argument that the conditions laid down in paragraph 35 of the CJN are not fulfilled must be rejected.
...

On those grounds,
THE GENERAL COURT (Sixth Chamber)
hereby:

1.
Dismisses the action;

2.
Orders Canon Inc. to bear its own costs as well as those incurred by the European Commission;

3.
Orders the Council of the European Union to bear its own costs.

Marcoulli
Frimodt Nielsen
Norkus
Delivered in open court in Luxembourg on 18 May 2022.
[Signatures]
(
*1
)	Language of the case: English.
(
)	Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.