AG Emiliou: careful treading in hybrid cartel procedures

NL Law

On 12 May 2022, Advocate General (AG) Emiliou delivered his Opinion proposing that the European Court of Justice (ECJ) dismiss HSBC’s appeal. Although the AG criticised the General Court’s analysis of the procedural aspects and its understanding of the ‘by object’ case law, he found that, were the grounds of the General Court’s judgment to be substituted, the operative part of the judgment could be considered well founded based on the adjusted legal grounds. Therefore, the General Court’s errors have not affected the outcome of the proceedings against HSBC.

Nevertheless, AG Emiliou’s critique of the General Court may help raise the threshold for the analysis of procedural aspects in hybrid cartel procedures and of the ‘by object’ classification of cartel behaviour in future cases. If the Opinion is ultimately followed by the ECJ, there would be more room for parties to raise pro-competitive effects in the context of the classification of behaviour as a ‘by object’ infringement of competition.

Background of the dispute

The case concerns the Commission’s investigation into an alleged cartel aimed at distorting the pricing of Euro Interest Rate Derivatives, financial products whose prices are linked to the Euro Interbank Offered Rate (Euribor). Barclays, Deutsche Bank, Société Générale and RBS settled the case. Later, in 2016, the Commission fined the non-settling parties, HSBC, JPMorgan and Crédit Agricole for their participation in the cartel. Following HSBC’s appeal, the General Court (GC) annulled its fine based on arguments related to the calculation of the fine, but rejected the majority of HSBC’s substantive and procedural arguments. AG Emiliou’s recent Opinion aims to guide the Court of Justice in its review of HSBC’s appeal against the GC’s decision, notably on the restriction of competition ‘by object’ and the presumption of innocence in staggered hybrid cartel proceedings.

On the ‘by object’ qualification of HSBC’s behaviour

In a ‘by object’ analysis, the Commission must investigate whether specific circumstances indicate that the conduct is outright incapable of negatively affecting competition. In line with earlier case law (see our February 2020 newsletter), AG Emiliou sides with HSBC and finds that pro-competitive effects qualify as such circumstances and are relevant for establishing a restriction of competition ‘by object’, even outside of the ancillary restraints doctrine and Article 101(3) TFEU.

Relevant and sufficiently significant pro-competitive effects raising doubts as to whether the agreement had an anticompetitive object must therefore be considered when assessing whether conduct infringes competition ‘by object’. But when looking at HSBC’s behaviour, AG Emiliou fails to see any pro-competitive effects, noting, for example, that even conduct leading to price reductions can restrict competition ‘by object’.

On procedural matters regarding staggered hybrid proceedings

In staggered hybrid cartel proceedings, the Commission first adopts a decision against the settling parties and later adopts a decision against the non-settling parties. HSBC is arguing that statements from Commission officials and references to HSBC in the settlement decision breached the presumption of innocence.

While finding that the presumption of HSBC’s innocence had been respected, the AG criticises the GC for submitting HSBC to a stringent harmless error test, according to which a procedural error leads to the annulment of a decision only if the applicant can prove that the outcome of the procedure would have been different, thereby setting a ‘high probability’ standard. However, the AG notes that a ‘lighter’ harmless error test has become the ‘standard’ one in recent case law. It would therefore have sufficed for HSBC to demonstrate that the breach may have influenced the outcome of the proceedings.

AG Emiliou criticises the GC for applying the wrong legal test and for failing to check whether the settlement decision included expressions of HSBC’s guilt, as required by Pometon (see our April 2021 newsletter). However, he ultimately finds no reason to strike down the judgment, as its operative part could be considered well founded based on adjusted legal grounds.


If ultimately followed by the ECJ, AG Emiliou’s clear and straightforward Opinion would allow parties to cartel proceedings to more efficiently raise pro-competitive effects in the context of the classification of behaviour as a ‘by object’ infringement of competition and would clarify the consequences of procedural errors committed by the Commission during the administrative process.

This article was published in the Competition Newsletter of June 2022. Other articles in this newsletter: