Case T‑105/17
HSBC Holdings plc and Others
v
European Commission
Judgment of the General Court (Second Chamber, Extended Composition), 24 September 2019
(Competition — Agreements, decisions and concerted practices — Euro Interest Rate Derivatives sector — Decision establishing an infringement of Article 101 TFEU and Article 53 of the EEA Agreement — Manipulation of the Euribor interbank reference rates — Exchange of confidential information — Restriction of competition by object — Single and continuous infringement — Fines — Basic amount — Value of sales — Article 23(2) of Regulation (EC) No 1/2003 — Obligation to state reasons)
1. Agreements, decisions and concerted practices — Adverse effect on competition — Criteria for assessment — Content and objective of a cartel and economic and legal context of its development — Distinction between infringements by object and infringements by effect — Intention of the parties to an agreement to restrict competition — Not a necessary criterion — Infringement by object — Sufficient degree of harm — Criteria for assessment — Obligation to state reasons — Scope
(Art. 101(1) and Art. 296 TFEU; EEA Agreement, Art. 53)
(see paragraphs 52-58, 94-111, 138-155, 174-194)
2. Agreements, decisions and concerted practices — Concerted practice — Meaning — Exchange of information between competitors — Adverse effect on competition — Assessment having regard to the nature of the infringement — Information likely to distort the normal course of price components in the relevant sector — Infringement by object — Conditions
(Art. 101(1) TFEU; EEA Agreement, Art. 53)
(see paragraphs 59-67, 94-111, 138-155, 174-194)
3. Agreements, decisions and concerted practices — Adverse effect on competition — Ancillary restriction — Meaning — Restriction necessary for the implementation of a main operation which is not anticompetitive — Main operation constituting a restriction of competition by object — Evidence of need for information exchange
(Art. 101(1) and (3) TFEU; EEA Agreement, Art. 53)
(see paragraphs 157-160)
4. Agreements, decisions and concerted practices — Prohibition — Infringements — Agreements and concerted practices constituting a single infringement — Attribution of liability for the entire infringement to a single undertaking — Conditions — Unlawful practices and conduct forming part of an overall plan — Assessment
(Art. 101(1) TFEU; EEA Agreement, Art. 53)
(see paragraphs 196-205, 232-237, 248-274)
5. Competition — Administrative procedure — Commission decision finding an infringement — Burden of proving the infringement and its duration on the Commission — Extent of the burden of proof — Degree of precision required of the evidence used by the Commission — Body of evidence — Judicial review — Scope — Decision leaving a doubt in the mind of the Court — Compliance with the principle of the presumption of innocence
(Art. 101(1) TFEU; Charter of Fundamental Rights of the European Union, Art. 48(1); EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 2)
(see paragraphs 197-205)
6. Competition — Administrative procedure — Settlement procedure — Procedure not involving all the participants in a cartel — Applicability of the principle of the presumption of innocence — Scope
(Art. 101(1) TFEU; Charter of Fundamental Rights of the European Union, Art. 48(1); EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 33; Commission Regulation No 773/2004, as amended by Regulation No 622/2008, Art. 10a)
(see paragraphs 283-293)
7. Action for annulment — Judgment annulling a measure — Scope — Partial annulment of an act of EU law — Partial annulment of a Commission decision classifying various incidents of anticompetitive behaviour as a single and continuous infringement and imposing a fine — Insufficient characterisation of the restrictive object of contact competition — Insufficient elements to attribute specific conduct to the undertaking — No impact on the legality of the finding of the infringement
(Art. 101 and Art. 264(1) TFEU; EEA Agreement, Art. 53)
(see paragraphs 294-296)
8. Competition — Fines — Decision imposing fines — Obligation to state reasons — Scope — Possibility of the Commission departing from the Guidelines for the calculation of fines — Obligation to state reasons all the stricter
(Arts 101(1) and 296(2) TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Communication from the Commission 2006/C 210/02, point 37)
(see paragraphs 338-341, 344-353)
9. Competition — Fines — Amount — Determination — Determination of the basic amount — Methodology established by the Guidelines not applied — Whether permissible — Conditions — Replacement value from cash receipts with reduction factor — Inadequate statement of reasons to determine the reduction factor
(Art. 101(1) TFEU; EEA Agreement, Art. 53; Council Regulation No 1/2003, Art. 23(2); Communication from the Commission 2006/C 210/02, points 13 and 37)
(see paragraphs 318-328, 332-334)
Résumé
In its judgment HSBC Holdings and Others v Commission (T‑105/17), delivered on 24 September 2019, the General Court partially annulled the Commission’s decision finding that HSBC Holdings and other companies active in the Euro-denominated interest rate derivatives market (Euro Interest Rate Derivatives, ‘EIRD’ or ‘EIRDs’) had infringed Article 101 TFEU and Article 53 of the Agreement on the European Economic Area (EEA) by participating in a single and continuous infringement. (1) According to the Commission, that infringement consisted of a set of agreements and/or practices consisting of exchanges between their traders relating, first, to the manipulation of Euribor’s submissions, secondly, to the exchanges about EIRD trading positions and, thirdly, detailed information not publicly available on their intentions and pricing strategy for EIRDs. The Commission accordingly imposed a fine on them.
The applicants brought an action under Article 263 TFEU before the General Court seeking, in the first place, partial annulment of the contested decision and, in the alternative, a variation of the fine.
The Court, first of all, examined the classification of restriction by object applied to the different categories of conduct complained of by the Commission. It noted, first, that the Commission’s reasoning contains no error of law or of assessment with regard to the conduct linked to the manipulation of Euribor’s submissions. Secondly, the same conclusion applied to the exchanges relating to the intentions and strategy in relation to the EIRD prices.
On the other hand, the Court noted, thirdly, that certain discussions during which traders exchanged information on their trading positions did not have the object of restricting competition accepted by the Commission, since such discussions had not alleviated or removed the degree of market uncertainty in such a way that the Commission could infer from it an impact on the normal course of price components in the EIRD sector, without having to examine their effects. The Court therefore found that the contested decision is vitiated by an error of law on this point.
In that regard, the Court stated, however, that that error has no bearing on the legality of the finding of the applicants’ participation in the infringement in question, as it is worded in the contested decision. On the other hand, the Court made clear that the number and the intensity of the incidents of infringing conduct characterise, among other factors, the gravity of the infringement on which the amount of the fine depends.
In the assessment of the amount of the fine, the Court was called upon to rule on the choice made by the Commission to adapt the methodology set out in the 2006 Guidelines (2) for the determination of the basic amount by reference to the value of sales, since the EIRDs do not generate sales within the usual meaning of the term. In its examination, the Court found that the Commission relied on a replacement value calculated on the basis of the cash receipts collected under the EIRD to which a reduction factor of 98.849% was applied, intended to take into account the compensation inherent in the EIRD sector linked to the payments made. However, the Court emphasised that the reduction factor plays an essential role because of the particularly high amount of cash receipts to which it is intended to apply. The Court concluded that, having regard to the essential role played by the reduction factor in the method used by the Commission, the statement of reasons for the contested decision must enable the undertakings concerned to understand how the Commission had ended up with a factor reduction set precisely at 98.849% and the Court to exercise in-depth review, in law and in fact, of that factor of the contested decision. However, the various justifications advanced by the Commission in the contested decision did not meet those requirements. The Court therefore annulled the contested decision, in so far as it imposed a fine of EUR 33 606 000 on the applicants, on the ground of insufficient reasoning.