Case T‑113/17
(publication in extract form)
Crédit agricole SA
and
Crédit agricole Corporate and Investment Bank
v
European Commission
Judgment of the General Court (Tenth Chamber, Extended Composition) of 20 December 2023
(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 Benchmark Rates – Exchange of confidential information – Restriction of competition by object – Single and continuous infringement – ‘Hybrid’ procedure staggered over time – Presumption of innocence – Impartiality – Fines – Basic amount – Value of sales – Article 23(2) and (3) of Regulation (EC) No 1/2003 – Obligation to state reasons – Amending decision supplementing the statement of reasons – Equal treatment – Unlimited jurisdiction)
1. Competition – Administrative procedure – Article 6 of the European Convention on Human Rights not applicable – Applicability of general principles of EU law – Principle of good administration – Audi alteram partem rule – Principle of the presumption of innocence – No infringement
(Art. 101(1) TFEU; Charter of Fundamental Rights of the European Union, Arts 41 and 48)
(see paragraphs 42-51, 65-71)
2. Competition – Administrative procedure – Observance of the rights of the defence – Hearing of undertakings – Refusal by the Commission to answer questions raised by the undertakings concerned during the hearing – Whether permissible
(Council Regulation No 1/2003, Art. 27; Commission Regulation No 773/2004, Art. 14)
(see paragraphs 54-60)
3. Competition – Administrative procedure – Settlement procedure – Procedure not involving all the participants in a cartel – Adoption of a settlement decision and of a decision at the end of an ordinary procedure staggered over time – Whether permissible – Conditions – Observance of the duty of impartiality and of the presumption of innocence – Observance of the rights of the defence – Scope
(Art. 101 TFEU; Charter of Fundamental Rights of the European Union, Arts 41 and 48; Council Regulation No 1/2003, Art. 10a)
(see paragraphs 75-107, 137-139)
4. Competition – Administrative procedure – Commission decision finding an infringement – Duty of the Commission to examine carefully and impartially all the relevant aspects of the individual case – Public statements made by the competition Commissioner during the administrative procedure – Statements that may demonstrate a lack of subjective impartiality – No impact on the impartial assessment of the case by the Commission
(Art. 101(1) TFEU)
(see paragraphs 111-121)
5. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Subject matter – Communication of responses to the statement of objections – Conditions – Need to draw a distinction between incriminating and exculpatory documents
(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 27(2))
(see paragraphs 146-170)
6. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Obligation to make the entire file available – Limits – File containing confidential information from other parties to the proceedings – Reconciliation of rights of defence with the protection of confidentiality – Access to confidential information under a data room procedure – Whether permissible
(Arts 101 and 339 TFEU; Council Regulation No 1/2003, Art. 27(2); Commission Regulation No 773/2004, Art. 15)
(see paragraphs 171-183)
7. Agreements, decisions and concerted practices – Agreements between undertakings and concerted practices – Concept – Participation in meetings having an anticompetitive object – Included – Condition – Undertaking concerned not distancing itself from the decisions adopted – Condition satisfied
(Art. 101(1) TFEU)
(see paragraphs 213-228)
8. Agreements, decisions and concerted practices – Concerted practice – Definition – Coordination and cooperation incompatible with the obligation on each undertaking to determine independently its conduct on the market – Exchange of information between competitors – Exchanges of confidential information between traders of financial institutions – Exchanges relating to attempted manipulations of the Euribor interbank reference rates – Exchanges on trading positions and pricing strategies in the Euribor- or EONIA-linked derivatives sector – No pro-competitive effects that are demonstrated, relevant and specifically related to the agreement concerned and sufficiently significant – Exchanges revealing a sufficient degree of harm to be regarded as being restrictions by object
(Art. 101(1) TFEU)
(see paragraphs 238-254, 260-335)
9. Competition – EU rules – Infringements – Attribution – Possibility to attribute to an undertaking the conduct of its employees – Conditions – Employees performing their duties for and under the direction of the undertaking
(Art. 101 TFEU)
(see paragraphs 338-350)
10. 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 – Criteria – Contribution to the single objective of the infringement – Knowledge or foreseeability of the overall plan of the agreement, decision or concerted practice and of its key elements
(Art. 101(1) TFEU)
(see paragraphs 353-364, 375-432)
11. 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 – Continuous infringement
(Art. 101 TFEU)
(see paragraphs 438-449)
12. Competition – Fines – Amount – Determination – Judicial review – Unlimited jurisdiction of the EU judicature – Scope – Determination of the amount of the fine imposed – Criteria for assessment
(Arts 101(1) and 261 TFEU; Council Regulation No 1/2003, Arts 23(2) and 31)
(see paragraphs 459, 460, 656-683)
13. Competition – Fines – Amount – Determination – Determination of the basic amount – Determination of the value of sales – Application of the method laid down in the guidelines – Proxy established on the basis of cash receipts discounted by the application of a discount factor – Inadequate statement of reasons as regards the determination of the discount factor
(Art. 101(1) TFEU; Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, points 13 and 37)
(see paragraphs 474-488, 496-512)
14. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision to apply competition rules – Correction of an error of reasoning during the proceedings before the Court by the adoption of an amending decision – Not permissible
(Arts 101(1) and 296, second para., TFEU)
(see paragraphs 519-526)
15. Competition – Fines – Amount – Determination – Determination of the basic amount – Determination of the value of sales – Application of the method laid down in the guidelines – Proxy established on the basis of cash receipts discounted by the application of a discount factor – Calculation of the cash receipts of undertakings involved in the same infringement using different methodologies – Immaterial impact on the values used – No breach of the principle of equal treatment
(Art. 101(1) TFEU)
(see paragraphs 532-556, 571-587)
16. Competition – Administrative procedure – Request for information – No obligation on the Commission to check all information provided – Sufficient evidence to question the information provided – Obligation on the Commission to adopt additional investigative measures
(Art. 101 TFEU; Council Regulation No 1/2003, Art. 18)
(see paragraphs 559-569)
17. Competition – Fines – Amount – Determination – Determination of the basic amount – Gravity of the infringement – ‘Entry fee’ – Factors to be taken into consideration
(Council Regulation No 1/2003, Art. 23(2) and (3); Commission Notice 2006/C 210/02, point 25)
(see paragraphs 617-624)
18. Competition – Fines – Amount – Determination – Adjustment of the basic amount – Mitigating circumstances – Lesser intensity of participation in the infringement compared with the participation of the main players – 10% reduction of the basic amount – No failure to observe the principles of proportionality, equal treatment and the individualisation of penalties
(Council Regulation No 1/2003, Art. 23(2); Commission Notice 2006/C 210/02, point 29)
(see paragraphs 628-652)
Résumé
In 2011, the Barclays banking group applied to the European Commission for leniency, informing it of the existence of a cartel in the Euro Interest Rate Derivatives (EIRD) sector.
Those EIRDs are linked to the Euro Interbank Offered Rate (Euribor), a set of benchmark interest rates intended to reflect the cost of euro-denominated interbank loans, or to the Euro Over-Night Index Average (EONIA), which fulfilled a function equivalent to that of Euribor, but with regard to daily rates. The Euribor rate is based on the individual quotes notified by the banks belonging to a panel made up of 47 financial institutions (‘the Euribor panel’).
Following the initiation of infringement proceedings by the Commission, the financial institutions Barclays, Deutsche Bank, Royal Bank of Scotland and Société générale decided to participate in a settlement procedure pursuant to Article 10a of Regulation (EC) No 773/2004. (1) At the end of that procedure, the Commission adopted, on 4 December 2013, a decision (2) finding that those institutions had participated in a single and continuous infringement with the object of distorting the normal course of pricing on the EIRD market.
Since the financial institutions Crédit agricole SA and Crédit agricole Corporate and Investment Bank (together, ‘Crédit agricole’), JP Morgan and HSBC had not submitted a proposal for settlement, the Commission continued its investigation against them.
By decision of 7 December 2016, (3) the Commission found that Crédit agricole had infringed Article 101 TFEU and Article 53 of the EEA Agreement by participating, from 16 October 2006 to 19 March 2007, in a single and continuous infringement with the object of distorting the normal course of pricing components on the EIRD market and imposed on it a fine of EUR 114 654 000.
According to the Commission, Crédit agricole’s infringing conduct consisted of discussions between its traders and a trader of another financial institution belonging to the Euribor panel concerning, in essence, the manipulation of their banks’ submissions to that panel for the purpose of the calculation of Euribor, trading positions as regards EIRDs and their pricing intentions and strategies concerning EIRDs.
Before the General Court, Crédit agricole seeks, first, the annulment in part of that decision, and, second, in the alternative, the annulment of the fine imposed or a reduction of the amount of that fine.
After the action was brought, the Commission adopted an amending decision (4) to supplement the statement of reasons provided in the light of the judgment in HSBC Holdings and Others v Commission, handed down by the Court in a related case. (5)
By its judgment, the Tenth Chamber (Extended Composition) of the General Court clarifies the criteria for establishing whether an undertaking participated in anticompetitive practices, in particular through the exchange of information, in the financial products sector. However, the Court annuls the contested decision in so far as it imposes a fine on Crédit agricole. It then exercises its unlimited jurisdiction and imposes on Crédit agricole a fine in an amount set at EUR 110 000 000.
Findings of the Court
As regards Crédit agricole’s claim that the Commission failed to observe their rights of defence and the adversarial principle by refusing to answer, at the hearing before the hearing officer, certain questions concerning the method of calculating the penalty envisaged, , the Court states that, although the hearing officer has the option of allowing the parties to ask questions during the hearing, the main objective of that hearing is to give the opportunity in particular to the addressees of the statement of objections to develop their views as to the preliminary findings of the Commission. Moreover, the Commission is not required to provide, at the stage of the administrative procedure, details on how it intends to implement the criteria relating to the gravity and duration of the infringement in determining the amount of fines.
Similarly, the Commission did not fail to observe Crédit agricole’s rights of defence by organising its access to certain documents in the file originating from other parties by means of the data room procedure. Since the information in question had not lost its confidential nature, despite its age, the data room procedure was an appropriate tool to reconcile Crédit agricole’s rights of defence and the right to confidentiality of the banks that provided that information. Moreover, Crédit agricole had not demonstrated that it would have been better able to defend itself by obtaining full access to that information directly rather than through its external advisers.
Next, the Court confirms that there was infringing conduct attributable to Crédit agricole.
As regards Crédit agricole’s participation in Euribor rate manipulation practices, the Court states that the exchanges between traders relied on against Crédit agricole in the contested decision clearly reveal the communication of rate preferences, of associated trading positions and of an offer or an intention on the part of the Crédit agricole traders to influence their bank’s submission to the Euribor panel.
Moreover, the arguments put forward by Crédit agricole seeking to demonstrate the minor role that that institution played in the manipulations at issue are ineffective, since those factors, relating to the number and intensity of the incidents of anticompetitive conduct, are not material to the establishment of the existence of an infringement on the part of that institution, but only to the assessment of the gravity of the infringement or of mitigating circumstances and if and when it comes to determining the fine.
As regards the Commission’s finding of a single infringement, the Court states that three factors are decisive for concluding that an undertaking participated in such an infringement:
(i) the various forms of conduct in question must form part of an ‘overall plan’ with a single objective;
(ii) the undertaking must have been aware of the offending conduct planned or put into effect by other undertakings in pursuit of the same objectives or have reasonably been able to foresee all that conduct and have been prepared to take the risk; and
(iii) the undertaking must have intended, through its own conduct, to contribute to the common objectives pursued by all the participants.
As regards the first factor, the Court finds that all the exchanges at issue have the single objective, as identified by the Commission, of influencing the cash flows payable under EIRDs to the detriment of the market participants not participating in those exchanges.
As regards the second factor, the Court notes that the Commission had direct evidence that Crédit agricole was aware that it was participating with other banks in concerted actions to manipulate the Euribor rate with a view to altering cash flows payable under EIRDs. Indeed, it is clear from the evidence put forward in the contested decision that its traders knew or could reasonably have foreseen that their exchanges seeking to manipulate the Euribor rate were part of an ‘overall plan’ going beyond the scope of bilateral exchanges.
By contrast, that is not the case with regard to the exchanges concerning pricing intentions and strategies, in respect of which the evidence relied on in the contested decision does not establish that Crédit agricole knew or could reasonably have foreseen that they went beyond the scope of bilateral exchanges and were part of an overall plan also involving other banks. In so far as concerns those exchanges, participation in a single infringement could not be attributed to Crédit agricole.
As regards the third factor, it is apparent from the exchanges relied on by the Commission against Crédit agricole that the traders involved intended to engage in anticompetitive practices.
Having thus confirmed in part the finding that Crédit agricole participated in the single and continuous infringement at issue, the Court rejects the request for annulment as far as the finding of an infringement was concerned, since that finding is justified to a sufficient legal standard by the findings that are not vitiated by error. However, the Court upholds the request for the annulment of the contested decision in so far as it imposes a fine in the amount of EUR 114 654 000 on Crédit agricole.
In that regard, the Court notes, first, that that penalty does not reflect Crédit agricole’s participation in the single and continuous infringement since the Commission was wrong to attribute to it the conduct of the other banks in relation to the exchanges on pricing intentions and strategies that did not take place with a view to manipulating rates.
Second, the Court finds that the determination of the amount of the fine imposed on Crédit agricole is vitiated by an inadequate statement of reasons.
Although the Commission did not make an error of assessment by using, for the purpose of determining the amount of the fine imposed on Crédit agricole, discounted cash receipts as the proxy for the value of sales, it did not sufficiently explain why the discount factor applied to those receipts was set at 98.849%. Furthermore, since the Commission did not demonstrate that certain circumstances made it practically impossible to state to the requisite legal standard the reasons for the contested decision in that respect, the supplement to the statement of reasons provided in that regard in the amending decision cannot be accepted either, without it amending the operative part of the contested decision.
According to the Court, the Commission also breached its obligation to undertake a diligent examination since, despite there being sufficient evidence to question the uniformity of the methodologies followed by the banks concerned to calculate their cash receipts, it did not adopt additional investigative measures. However, such a failure to observe the principle of good administration could only lead to the annulment of the contested decision if Crédit agricole had demonstrated that, as a result of the methodological differences in question, the basic amounts of the fines imposed were calculated in breach of the principle of equal treatment. In the light of the immaterial impact of those differences on the level of the cash receipts, they are not liable to result in a breach of the principle of equal treatment in the present case.
Lastly, exercising its unlimited jurisdiction, the Court examines Crédit agricole’s claim for a reduction of the amount of the fine that was imposed on it.
Noting that the fixing of a fine in the exercise of its unlimited jurisdiction is not an arithmetically precise exercise, the Court uses, as the Commission did in its approach, the value of discounted cash receipts as the initial data for determining the basic amount of the fine, since that value reflects the economic significance of the infringement and the strength of the undertaking in the infringement.
As regards determining the reduction factor, the application of which is necessary in order to prevent the imposition of a fine that is over-deterrent, the Court notes that the parties agree that that factor should be set at 98.849% at the very least.
With regard to the gravity of the infringement, the Court states that, since the conduct at issue relates to factors that are relevant to the determination of the prices of EIRDs, they are, by their very nature, among the most serious of restrictions to competition. In addition, the practices at issue are particularly serious and harmful since they are liable not only to distort competition on the EIRD market, but also, more broadly, to compromise the trust placed in the banking system and the financial markets as a whole and their credibility.
With regard to mitigating circumstances, the Court finds that Crédit agricole played a less important role in the infringement than the main players. However, participation in the infringing conduct was intentional. Moreover, the conduct at issue is particularly serious. Consequently, the impact of the mitigating circumstances accepted on the final amount of the fine can be only marginal.
In conclusion, the Court finds that, on a fair assessment of the circumstances of the case, the amount of the fine should be set at EUR 110 000 000.
In the light of the foregoing, the Court annuls the contested decision in so far as it imposes a fine on Crédit agricole, sets the fine at EUR 110 000 000 and dismisses the action as to the remainder.