Short Reads

General Court partially annuls the European Commission's ICAP decision (in the YIRD case)

General Court partially annuls the European Commission's ICAP decision

General Court partially annuls the European Commission's ICAP decision (in the YIRD case)

01.12.2017 NL law

On 10 November 2017, the General Court (GC) partially annulled the European Commission's 2015 decision to fine UK-based broker ICAP close to EUR 15 million for "facilitating" various infringements relating to Yen interest rate derivatives (YIRDs). The GC's judgment provides a useful overview of the current state of EU case law on (i) "by object" infringements; (ii) the role of facilitators in cartel cases; (iii) "complex single and continuous infringements"; (iv) the presumption of innocence; and (v) the Commission's duty to state reasons when setting the level of a fine.

Background

By way of background, the Commission's YIRD investigation resulted in a "hybrid" scenario in which all parties, except for ICAP, chose to settle. In December 2013, the Commission adopted a settlement decision which resulted in fines for 8 financial institutions for their involvement in 7 bilateral cartels. The cartels consisted of discussions between the banks' traders aimed at influencing the Japanese Yen (JPY) LIBOR and Euroyen TIBOR reference interest rates. These reference rates, in turn, were reflected in the pricing of Japanese Yen interest rate derivatives. No appeals were lodged against the settlement decision.

After ICAP notified the Commission of its intention to discontinue the settlement procedure, the Commission continued its investigation under the "regular" procedure. Subsequently, on 4 February 2015, the Commission adopted a decision holding ICAP liable for playing a facilitating role in 6 of the bilateral cartels mentioned above. In particular, the Commission claimed that ICAP disseminated misleading information and attempted to influence the panel of banks that set the JPY reference interest rates.

By object infringements and liability of cartel facilitators

On appeal, the GC dismissed ICAP's pleas concerning the "by object" nature of the infringement and the relevant standard of proof for establishing its liability as a facilitator. The GC held that each infringement contained evidence of coordination between the banks and exchanges of forward-looking confidential information that could affect pricing. In accordance with existing case law, the GC held that the Commission was entitled to qualify the infringements as by object restrictions.

The GC reiterated that companies that are not active on the market(s) affected by the infringement can be held liable as facilitators. To that effect, the GC held that the Commission should demonstrate whether the company intended to contribute to the common objectives of the participants and was or should have been aware of the actual or planned conduct put into effect by the other undertakings. For most of the infringements concerned, the GC found that the Commission had adduced enough evidence to prove ICAP's awareness of the cartels. For one infringement (the UBS/RBS 2008 infringement), however, the GC held that the underlying evidence was inconclusive. The GC annulled the Commission's decision insofar as ICAP was held liable for facilitating that cartel.

Duration, presumption of innocence and fine calculation

The GC also upheld ICAP's pleas relating to the duration of its participation in three other cartels. After reviewing the documentary evidence in detail, the GC found that the Commission was unable to hold ICAP liable for the entire duration of each of those cartels. In this case, the GC held that since JPY LIBOR rates are set on a daily basis "the effects of manipulating those rates are limited in time and that the manipulation needs to be repeated in order for those effects to continue". Therefore, the Commission could not "assume" that ICAP was continuously involved for the full duration of each cartel without proof that ICAP participated by adopting "positive measures" on a daily basis or "at least sufficiently limited in time". 

In addition, the GC found that the Commission infringed the presumption of ICAP's innocence by taking a position on ICAP's involvement in the 2013 settlement decision, i.e. before the Commission concluded its investigation into ICAP under the regular procedure in 2015. This finding, however, could not lead to annulment of the settlement decision since ICAP was not an addressee of that decision. At the same time, the GC essentially held that its review of ICAP's other pleas was sufficient to address the possible impact of a lack of impartiality in the contested decision.

With respect to the fine, the GC held that the Commission's decision provided insufficient detail on the methodology it had applied to determine the level of the fine. In particular, according to the GC, the decision did "not provide the minimum information which might have made it possible to understand and ascertain the relevance and weighting of the factors taken into consideration by the Commission in the determination of the basic amount of the fines". On that basis, the GC annulled the fine imposed on ICAP.

Implications

This judgment shows that the EU courts will continue to scrutinize the Commission's assessment of the facts and law in detail, while placing particular importance on the parties' (procedural) rights of defence. In so-called "hybrid cases" in particular, the GC highlights that settlement decisions should not pre-judge the outcome of the Commission's investigation into non-settling parties.

On the other hand, the ICAP judgment confirms that a third party can be held liable for playing a facilitating role in cartels, even if it was not active on the market concerned by the infringement [see our November 2015 Newsletter for an article on the AC-Treuhand case]. The GC also confirmed that conduct can be classified as a "by object" infringement, even if it does not relate directly to prices. Moreover, where the conduct is classified as a complex single and continuous (or repeated) infringement, the Commission is not required to prove that each constituent category of conduct qualifies as a "by object" restriction.

This article was published in the Competition Law Newsletter of December 2017. Other articles in this newsletter:

  1. Court of Justice rules on the application of competition law to agricultural producer organisations
  2. Court of Justice dismisses appeal of British Airways in Air Cargo case
  3. National courts may declare that a practice infringes competition law after it was the subject of a commitment decision

Team

Related news

02.04.2020 NL law
ACM played high stakes and lost: no more fixed network access regulation

Short Reads - The ACM’s failure to meet the requisite standard of proof has led to the fixed networks of Dutch telecom providers KPN and VodafoneZiggo being free from access regulation. The Dutch Trade and Industry Appeals Tribunal ruled that the ACM had failed to demonstrate the existence of collective dominance, and that KPN and VodafoneZiggo would tacitly coordinate their behaviour absent regulation.

Read more

26.03.2020 BE law
​I am suffering significant financial losses as a result of the spread of the corona virus. Is there a possibility of State aid?

Short Reads - COVID-19 brings certain questions to centre stage regarding State aid. In this short read, Peter Wytinck, Sophie Van Besien and Michèle de Clerck discuss the possibility of State aid in case of significant financial losses as a result of the spread of the corona virus.

Read more

02.04.2020 NL law
Claims assigned to a litigation vehicle: who needs to prove what?

Short Reads - Two recent decisions from the Amsterdam Court of Appeal have confirmed that litigation vehicles cannot come empty-handed to the court, and should provide documentation regarding the assignments of claims they submit. The Dutch legal system allows companies and individuals to assign their claims to a “litigation vehicle” or “claims vehicle” that bundles those claims into a single action. In its decisions of 10 March 2020, the Court of Appeal ruled that it is up to litigation vehicles to prove that the assignments can be invoked against the debtor. 

Read more

10.03.2020 NL law
De AVG staat niet in de weg aan de verwerking van persoonsgegevens door een toezichthouder tijdens een bedrijfsbezoek

Short Reads - Bedrijven die met toezicht worden geconfronteerd, zijn gehouden op verzoek van een toezichthouder in beginsel alle informatie te verstrekken. Met de komst van de Algemene verordening gegevensbescherming (AVG) is in de praktijk de vraag opgekomen of een toezichthouder bevoegd is om persoonsgegevens die onderdeel uitmaken van de gevraagde informatie te verwerken.

Read more

02.04.2020 NL law
EU competition policy agenda: full to the brim

Short Reads - The European Commission’s competition policy agenda stretches to 2024 and contains plans for many new or revised rules and guidelines. Recent publications, such as the New Industrial Strategy for Europe, shed more light on the Commission’s initiatives and their possible impact on parties from both inside and outside the European Union (EU). These new initiatives include temporary state aid rules to address the effects of the Corona crisis, consultations on the Block Exemption Regulations, and new measures in respect of (primarily) third-country companies.

Read more

05.03.2020 NL law
CBb confirms: no cartel fine, still interest to appeal cartel decision

Short Reads - Companies can challenge a decision establishing that they committed a competition law violation, even if no fine was imposed on them. The CBb – the highest court for public enforcement of cartel cases – recently confirmed that the absence of a fine does not affect a company’s interest to appeal. Consequently, parent companies held liable for a subsidiary’s cartel infringement can still challenge a cartel decision, irrespective of whether fines were imposed on them separately.

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring