Short Reads

Call of duty: Commission must state reasons when straying from its guidelines

Commission must state reasons when straying from its guidelines

Call of duty: Commission must state reasons when straying from its guidelines

01.08.2019 NL law

The European Commission has lost a second battle concerning its EUR 15 million fine imposed upon interdealer broker ICAP, this time before the European Court of Justice. The Court upheld the previous judgment of the General Court on the basis of the Commission's failure to state reasons concerning its fining methodology of cartel facilitator ICAP. This may lead to more reasoned Commission decisions in the future - deterrence of cartel behaviour does not justify keeping the methodology for setting the fines as a 'black box'.

This judgment, handed down on 10 July 2019, is the most recent instalment in the Commission's YIRD investigation, which publicly began with a settlement decision fining several financial institutions for a series of bilateral cartels, whereby the traders of the banks aimed to influence the level of two financial benchmarks through mutual discussions. ICAP was fined for facilitating some of these cartels. Specifically, the Commission found that ICAP had disseminated misleading information and attempted to influence the panel of banks that set the Japanese Yen reference interest rates. The General Court quashed the Commission's decision, partly because it had not sufficiently motivated the methodology used to set ICAP's fine. The Commission appealed the General Court's judgment.

The Court of Justice agreed with the General Court, emphasising that when the Commission departs from the fining methodology established in its Guidelines due to the particularities of the case, the methodology must be disclosed to the parties to safeguard their rights of the defence. For ICAP, the particularity was its role as facilitator. The disclosure must allow the parties to make their views known regarding the factors on which the Commission intends to base its fine on.

Scrutiny of the Commission' s compliance with its duty to state reasons has been high this July. The General Court recently found that, in one of the decisions taken in the retail food packaging cartel, the amount of reduction of a fine for reasons of inability to pay was insufficiently explained. Together with the Court of Justice judgment in ICAP, this may encourage undertakings to bring forward cases where the Commission did not properly explain how it reached the imposed fine level. European courts have certainly shown that, up to the highest level, they are willing to take fining methodology points on board. It is up to companies involved in cartel investigations to appeal on such grounds when the Commission fails to properly explain its methodology when straying from its fining guidelines.

 

This article was published in the Competition Newsletter of August 2019. Other articles in this newsletter:

Team

Related news

03.08.2022 EU law
Gotta catch ‘em all? Upward referral of ‘killer acquisitions’ upheld

Short Reads - Companies involved in intended or completed M&A transactions falling below EU and national merger notification thresholds should beware that their deals may still catch the European Commission’s eye. The General Court has upheld the Commission’s decision to accept a national referral request regarding Illumina’s acquisition of Grail: a transaction not triggering any of the notification thresholds within the EEA.

Read more

28.07.2022 NL law
Purely commercial interest also a legitimate interest? Council of State leaves the question unanswered.

Short Reads - On 27 July 2022, the Council of State confirmed that the Dutch Data Protection Authority wrongly imposed a €575,000 fine on VoetbalTV. But the Council did not answer the question whether the AP rightly or wrongly believes that a purely commercial interest cannot be a legitimate interest within the meaning of the General Data Protection Regulation.

Read more

06.07.2022 NL law
Highest Dutch court: the postman may still ring twice?

Short Reads - The Dutch Minister of Economic Affairs and Climate Policy was wrong to unblock the ACM’s prohibited merger between postal operators PostNL and Sandd on grounds of public interest. According to the Trade and Industry Appeals Tribunal (CBb), the Minister cannot substitute the ACM’s assessment for its own when considering public interest reasons. Since the Minister did do so in this particular case, the CBb annulled the Minister’s merger clearance.

Read more

28.07.2022 NL law
Zuiver commercieel belang ook gerechtvaardigd belang: Raad van State laat zich er niet over uit

Short Reads - Op 27 juli 2022 heeft de Raad van State bevestigd dat de Autoriteit Persoonsgegevens onterecht een boete van € 575.000 aan VoetbalTV heeft opgelegd. De hoop bestond dat de Afdeling antwoord zou geven op de vraag of de AP terecht of onterecht meent dat een zuiver commercieel belang géén gerechtvaardigd belang kan zijn in de zin van de Algemene Verordening Gegevensbescherming. Het antwoord op deze vraag blijft echter uit.  

Read more

06.07.2022 NL law
Foreign Subsidies Regulation crosses the finish line

Short Reads - On 30 June 2022, the European Parliament and the European Council reached agreement on the final text of the Foreign Subsidies Regulation. Adding to the regulatory burdens, this Regulation creates a notification obligation for companies that receive subsidies from non-EU governments in transactions or public procurement procedures. 

Read more