TY - JOUR
AU1 - Falconi,, Fabio
AU2 - Suhr,, Lars
AB - Key Points From May 2016 to December 2017 there were important developments in the application of EU and UK competition laws in the financial services sector in banking, payment systems, insurance, and capital markets. At UK level, this survey provides an overview of the retail banking investigation, merger decisions a and private damages actions. At EU level, this survey covers the review of the Insurance Block Exemption Regulation, the General Court’s Icap judgment, merger decisions, and state aid decisions. From May 2016 to December 2017 (the Relevant Period) there have been a number of interesting developments in the application of EU and UK competition laws in the financial services sector in banking, payment systems, insurance, and capital markets. This survey provides an overview of the varied landscape of interventions: from state aid decisions and the UK retail banking investigation in banking to merger control cases and private damages actions in payment systems, from the European Commission’s (Commission) review of the Insurance Block Exemption Regulation in insurance to the General Court’s Icap judgment coming out of the Yen Interest Rate Derivatives cartel and two merger control prohibitions in financial infrastructure markets (one at EU level – Deutsche Börse/London Stock Exchange Group – and one at UK level – Intercontinental Exchange/Trayport). I. Banking A. State aid In the Relevant Period the Commission issued 55 decisions involving state aid to banks (of which 53 decisions either did not raise objections or, more rarely, found that the proposed measure did not qualify as aid). We consider the following decisions as of particular interest: On 18 July 2017, the Commission approved a restructuring plan for Vestjysk Bank and gave final approval for past aid. As background, in 2012 the Commission had temporarily approved as ‘rescue aid’ a number of measures that Denmark had granted to Vestjysk Bank, including an increase in capital, the sale of a minority shareholding to the Danish Central Bank and individual state guarantees for new bonds.1 In 2013, Denmark had then launched a sales process to divest its entire stake in Vestjysk Bank’s, which was initially unsuccessful. In late 2016, a consortium led by Nykredit submitted a new restructuring plan and an undertaking to buy Denmark’s entire shareholding in the bank. In its decision, the Commission first analysed whether the sale of Vestjysk Bank as an aided credit institution would entail state aid to the buyers. It did not find this to be the case, as the sale was organised via an open, non-discriminatory and unconditional competitive tender with assets ultimately sold to the highest bidder. The Commission next assessed whether the aid granted by Denmark in 2012 to Vestjysk Bank could be finally approved as being compatible with the internal market. It found this to be the case in light of a re-assessment on burden-sharing, the limited risk of distortions of competition, and the fact that the updated restructuring plan would ensure the restoration of Vestjysk Bank’s long-term viability. The Commission also noted that Denmark had given a number of commitments to underpin Vestjysk Bank’s return to profitability and to limit potential distortions of competition. On 18 September 2017, the Commission approved an alternative package to replace the commitment for Royal Bank of Scotland (RBS) to divest its ‘Rainbow business’ (i.e., retail and SME banking business including 314 branches across the UK under the Williams & Glyn brand).2 As background, in the wake of the financial crisis the UK had granted a number of state aid measures to RBS, which the Commission had declared compatible with the internal market in 2009 on the basis of a restructuring plan and a number of commitments, including RBS’s divesture of the ‘Rainbow business’. The initial deadline for divestiture was set to end of 2013 and was subsequently extended to end of 2017 as RBS and UK authorities continued to face difficulties in selling the business. In early 2017, the UK government announced that it would seek to replace the divestiture commitment with a package of measures aiming at increasing competition in the SME and mid-corporate banking market. The proposed package consists of two RBS funding measures: a Capability and Innovation Fund of £425 million (the purpose of which is to pay out money to eligible entities in order to help them develop the capability to compete with RBS in services for SMEs and/or improve financial services for SMEs) and an Incentivised Switching Scheme of £350 million (the purpose of which is to incentivise SMEs to switch their business current accounts, deposit accounts and loans to eligible competitors – this measure alone aims to effectively transfer 3 per cent of RBS’s market share to competitors).3 The Commission assessed the new, alternative, package and found that it did not amount to new aid to RBS (as RBS had to fund the measures exclusively) but constituted aid to beneficiaries of the package because, although RBS funded the package, the UK still held 71.2 per cent of the shares in RBS. This potential aid was held to be compatible as necessary part of the commitments. The Commission then went on to analyse whether the update of the commitments would mean that the existing aid to RBS should now be regarded as incompatible with the internal market. The key question for this purpose was whether the new commitments were equivalent to those originally provided. In this regard, the Commission found that the alternative package would not negatively affect RBS’s ability to restore its viability without requiring further state aid. Also, the changes would not affect the previous burden-sharing assessment. The Commission held that the alternative package would be as effective in limiting distortions of competition as the divestiture of the Rainbow business – which had a 5 per cent market share for UK SME and mid-corporate customers – because RBS could be expected to lose a similar market share as a result of its implementation. The Commission also noted in this regard that RBS had genuinely tried to divest the Rainbow business and had incurred significant costs for that. B. Market investigation The most significant holistic consideration of competitive conditions in retail banking at member state level in the Relevant Period has been conducted by the UK Competition and Markets Authority (CMA) which in August 2016 published the final report4 containing a thorough assessment of the supply of UK retail banking services to consumers and SMEs.5 The CMA identified competition issues in relation to the switching of personal current accounts (PCAs), in particular for overdraft users, and of business current accounts (BCAs) and lending products for SMEs. Barriers to access and assess information on PCAs and BCAs charges and service quality6 make in particular difficult for PCA and BCA customers to be able to compare different banks’ products and services. The CMA also found low levels of customer engagement, a perception that switching was difficult (including low levels of awareness of, and confidence in, the Current Account Switch Service (CASS)) and incumbency advantages by the largest banks due to high customer acquisition costs and economies of scale. These features were exacerbated for PCA overdraft users (the heavier the use of overdrafts, the less likely the customer would switch). In relation to SMEs, the investigation revealed that many opened their BCA with their existing PCA provider, often without searching for alternative providers. The CMA found that PCA and BCA markets in both Great Britain (GB) and Northern Ireland (NI) were concentrated: the four largest banks in 2015 had 70 per cent in PCAs in GB (and lost collectively 5 per cent in the previous ten years) and 60 per cent in NI and 83 per cent in BCAs in GB and 86 per cent in NI. The CMA noted that the concentration levels increased following the financial crisis, with new entrants – only active in PCAs and not across all product and service lines – and smaller banks gaining little market shares. According to the CMA, a combination of mostly low customer engagement, barriers to searching and switching and incumbency advantages resulted in weak customer response to differences in prices and service quality, which led to market power of banks and ultimately reduced incentives for them to compete on prices, quality and innovation. To address these issues, which were found to be interrelated, the CMA imposed various remedies. In particular, the CMA’s Retail Banking Market Investigation Order (of February 2017) imposed on the nine largest banks in the UK7 an obligation to timely develop and implement an open Application Programming Interface (API) banking standard so that access to banking data is provided (via such API standard) to enable third parties to initiate a payment on behalf of a customer. The aim is to standardise the information (e.g., price and service features) regarding banking products and facilitate third-party access to such information, resulting in improved market transparency for customers and the development of more effective comparison tools. Via this standard, customers can also share their transaction data with third parties to receive targeted advice. The CMA considered this remedy as particularly important for improving management of PCAs, incentivising switching and developing new services and business models. The Open Banking Standard remedy ties in with EU-wide changes introduced by the second Payment Services Directive (PSDII), which has been implemented by Member States on 13 January 2018.8 As PSDII is a maximum harmonisation directive, CMA’s retail banking investigation remedies cannot go beyond PSDII requirements. The main difference between PSDII and the CMA’s Open Banking Standard remedy is that the latter is imposed only on the nine largest UK banks and it covers only PCAs (within the scope of the CMA market investigation). PSDII provides a new EU-wide regulatory framework for new forms of payment services – ‘payment initiation services’ – allowing users to make online payments without a debit or credit card by facilitating the initiation of payment from the user account to the merchant account, and ‘account information services’, which collect and consolidate a number of information, including in relation to PCAs, allowing consumers a consolidated view of their finances. In particular, PSDII requires banks to grant third parties access to bank account information (subject to customer consent). As PSDII does not specify a detailed standard on how account information can be accessed, the European Banking Authority has issued Draft Regulatory Technical Standards which specify in more detail what is required from banks.9 It is worth nothing that in October 2017 the Commission carried out unannounced inspections to banks and banking associations in a few Member States to obtain evidence in relation to alleged practices preventing parties ‘from gaining access to bank customers’ account data, despite the fact that the respective customers have given their consent to such access’.10 Further CMA remedies included a requirement for banks to display prominently a number of core indicators of service quality and to send customers occasional reminders ‘prompts’ to encourage switching. The CMA also imposed changes to the CASS system (e.g., by requiring Bacs11 to extend the current 36-month redirection period so as to provide further assurance to customers that their payments will not go missing after they switch bank). As regards PCA overdrafts, the CMA required banks to set and prominently display individual Monthly Maximum Charge capping the maximum unarranged overdraft fees/interest per month. The purpose of this measure was to improve transparency and protect vulnerable customers.12 II. Payment systems In relation to payment systems, it is worth reporting in the Relevant Period private damages actions in the UK in relation to Visa and MasterCard and a number of merger control cases at EU and UK level which were cleared subject to remedies. A. Private damages actions Visa and MasterCard have each been subject to several private damages claims in the UK, subsequent to the Commission decisions on EEA/intra-regional multilateral interchange fees13 (MIFs).14 In these decisions, the Commission had pursued the MIF arrangements as a type of ‘price fixing’ agreement (a finding which was subsequently upheld by the Court of Justice of the European Union upon appeal by MasterCard).15 While a fair number of court cases are still pending in the UK (e.g., by Deutsche Bahn, Merricks, and BT), or have been settled out of court, three cases have recently reached a judgment on substance at first instance. All these cases concern ‘standalone’ actions (as opposed to follow-on actions), which meant that the judges had to revisit the question of whether certain MIF arrangements violated Article 101 TFEU.16 Perhaps unsurprisingly, the outcomes have been diverging. The judgments turn on the questions of (i) what the most likely counterfactual is, (ii) whether MIFs were objectively necessary, and (iii) whether they qualify for exemption under Article 101(3) TFEU. In Sainsbury’s v MasterCard, the UK grocery retailer Sainsbury sued MasterCard for damages alleging that MasterCard’s setting of the UK domestic MIF was restrictive of competition. In July 2016, the Competition Appeal Tribunal found merit in the allegations and awarded Sainsbury’s £69 m in damages.17 It found that the MIFs in question qualified as a restriction of competition by effect. Regarding the counterfactual, the tribunal found that the most likely scenario was that bilaterally agreed interchange fees at a lower level would have been agreed by banks in place of the UK MIF. Also, the UK MIF was not found to be exemptible under Article 101(3) TFEU. The facts relied on were similar in Asda et al. v MasterCard, where a number of retailers had sued MasterCard for damages concerning MasterCard’s UK and Irish MIFs. On 30 January 2017, the High Court delivered its judgment finding however in favour of MasterCard dismissing the claims.18 While Justice Popplewell agreed in principle that the MIFs in question could restrict competition by setting a price floor, he considered MasterCard’s MIF as ‘objectively necessary’ and thus not in violation of competition law. He came to that conclusion based on the consequences of the counterfactual, which he found to be that of a zero/no MIF situation, on MasterCard’s ability to survive in the market. He in particular noted that if Visa’s MIFs were to continue to be set at their current levels but MasterCard were subject to a zero MIF, card issuing banks would ultimately move their entire card portfolios from MasterCard to Visa to maximise their revenues from interchange fees.19 MasterCard would thus be driven out of the market. As a consequence, MasterCard’s UK and Irish MIFs were considered as ancillary restraints objectively necessary for the operation of the card scheme, and the setting of the MIFs could thus not be regarded as anticompetitive. In Sainsbury’s v Visa, the High Court dismissed Sainsbury’s damages claim against Visa.20 In the judgment of 30 November 2017, Justice Phillips concluded that Visa’s UK MIF did not amount to restriction of competition by object or effect within the meaning of Article 101 (1) TFEU. He first noted that the mere fact that the setting of the UK MIF by Visa resulted in higher prices was insufficient in finding a restriction of competition. The relevant question was whether the agreement restricted competition in the first place (the result of which may be higher prices). He found the relevant counterfactual was a situation where Visa would not be allowed to set a default MIF. In that case, contrary to what the CAT had found in Sainsbury’s v MasterCard (2016), the evidence before the court showed it was unlikely that banks would bilaterally agree interchange fees. Rather, it was likely that banks would settle in par, meaning that the situation was comparable to having a default zero MIF. Based on this, he noted that the discrepancy between a default interchange fee at a certain level and a zero fee did not necessarily mean that a zero fee would be the result of a more competitive process. Sainsbury’s reasoning that Visa’s particular MIF was anticompetitive was found to be illogical as it effectively implied that any MIF level other than a zero MIF would be a restriction of competition, even though there was no basis to conclude that a zero MIF was the result of a less competitive process than any other option. In a two-sided market, a zero MIF was just one possibility of setting up the payment scheme, and there was no basis to conclude that this particular option was less restrictive of competition. Justice Phillips also considered to what extent Visa’s card scheme at a zero MIF would have been subject to competition by MasterCard. In contrast to the High Court in Asda et al. v MasterCard, he noted that any theoretical obligation on Visa to set the MIF at zero would most likely reciprocally apply to MasterCard due to the similarities involved (but ultimately this did not matter as competition law did not impose any such obligation). In a separate judgment of 23 February 2018, he further concluded that if – contrary to his prior judgment – Visa’s UK MIF had amounted to a restriction of competition, it would not have qualified for exemption under Article 101(3) TFEU.21 In particular, Visa had not shown to a sufficient degree that the UK MIF would have resulted in efficiencies. The judgments were appealed to the Court of Appeal, which joined the cases. On 4 July 2018,22 the Court of Appeal annulled the relevant judgments, holding that the rules of the relevant schemes providing for a default MIF in the absence of bilaterally agreed interchange fees infringed Article 101(1) TFEU. The Court of Appeal noted it was bound to follow the ECJ’s MasterCard judgment where relevant, and the correct counterfactual was a situation of no default MIFs and a prohibition on ex post pricing (or a settlement at par). The CAT had been wrong to conclude that issuers and acquirers would instead have agreed on bilateral interchange fees on a case by case basis. Further, the MIF rules were not objectively necessary for the survival of the MasterCard scheme in question. The MasterCard and Visa schemes also failed to be exempted under Article 101(3) TFEU. B. Merger control cases Payment services have been the object of merger control scrutiny at EU and UK level in the Relevant Period. The following conditionally cleared cases are worth mentioning.23 On 20 April 2016,24 the Commission conditionally cleared Worldline’s acquisition of sole control of Equens.25 Worldline is a French company active in the payments and transactional services industry while Equens is a Dutch company active the provision of payment services. The transaction combined two large EEA payments system operators. The Commission ultimately identified competition concerns in relation to merchant acquiring services in Belgium and the provision of software for the activities of network service providers in Germany. As regards Belgium, the Commission found that Worldline had a dominant market position in merchant acquiring on a national basis and that PaySquare (Equens’ subsidiary) imposed a competitive constraint on Worldline, despite being only a smaller player. The concern was therefore that the transaction would eliminate a crucial competitive force in the market. Moreover, given that merchant acquiring services and the provision of POS terminals was commonly provided as a bundle in Belgium, the Commission noted that the transaction would also strengthen Worldline’s ability to implement a foreclosure strategy to the detriment of competitors offering POS terminals to merchants. As regards Germany, Worldline was found to be a significant supplier of a software product (called Poseidon) to network service providers. Poseidon was regarded to be the de facto industry standard covering several functionalities associated with the processing of card transactions. The Commission noted that Worldline was not also active as network service provider but PaySquare was active in this market. The concern was therefore that going forward Worldline would be able and have the incentive to discriminate in favour of PaySquare to the detriment of PaySquare’s competitors. To remedy the concerns, the parties proposed to divest PaySquare’s Belgian subsidiary and to license the Poseidon software to network service providers based on FRAND terms. On 14 March 2017, the Commission then approved BNP Paribas Fortis (in conjunction with SIX) as a suitable purchaser for PaySquare’s divested business in Belgium.26 On 19 April 2017, the Commission conditionally cleared Advent International’s acquisition of sole control of Morpho.27 Advent International is a private equity fund controlling inter alia Oberthur Technologies, Istituto Centrale delle Banche Popolari Italiane, and Addiko Bank while Morpho is the identity and security solutions business of the Safran group. The analysis focused on the parties’ overlapping activities regarding smart cards in the banking sector (payment smart cards) and ID sector (ID smart cards) in a number of Member States and on an EEA-wide basis. The Commission also analysed a vertical relationship between Morpho as upstream supplier of payment smart cards and the downstream card issuing businesses of Advent International portfolio companies. Ultimately, the Commission found competition concerns regarding the market for payment smart cards in France, where the transaction would have effectively reduced the number of players from four to three (or even from three to two in the narrower personalised smart payment cards segment), thus leading to the elimination of an important competitive constraint. The Commission further noted that the relevant market was characterised by significant barriers to entry, as suppliers needed to be Cartes Bancaires certified to be able to operate on the market and such certification was subject to relatively stringent standards and involved a relatively cumbersome process and significant costs. Moreover, the Commission also noted that customers preferred suppliers with a local Cartes Bancaires certified personalisation site, and that there was a certain amount of customer inertia which made them less likely to switch to new providers. To address the competition concerns, the parties offered to divest Morpho’s French subsidiary CPS which supplies payment smart cards to French banks. On 30 January 2017, the CMA found that Mastercard’s acquisition of VocaLink could be expected to result in a substantial lessening of competition and would thus need to be referred for a phase 2 investigation unless the parties offered acceptable undertakings.28 Mastercard UK owns and operates credit and debit card schemes Mastercard, Maestro and Cirrus, and has also bid for the supply of infrastructure services to UK interbank payment systems. VocaLink is a supplier of payment infrastructure services to three major UK interbank payment systems (as noted below). Therefore, the CMA focused in its analysis on whether the anticipated acquisition would have brought about negative competitive effects regarding the supply of payment infrastructure services to Bacs, FPS29 or the LINK network. The analysis by the CMA was complicated by the fact that the UK Payments System Regulator (PSR) had recently conducted a review of the ownership and competitiveness of the infrastructure that supports the three major UK payment systems.30 The PSR had made a series of recommendations intended to improve the competition in payment systems, which meant that the CMA needed to consider these measures in its competition analysis.31 Ultimately, the CMA did not find any competition concerns with regard to Bacs and FPS. However, the transaction would critically reduce the number of credible bidders for the provision of payment infrastructure services to the LINK scheme, and thus limit LINK’s ability to obtain good value when tendering for such services as there were only three particularly credible providers in this space in the UK, with VocaLink and MasterCard being two of them. Subsequently, to address the identified competition concerns Mastercard offered a package of measures which consisted of VocaLink making its existing network connectivity to the LINK ATM network available to a new supplier, VocaLink transferring to LINK the intellectual property rights relating to the LINK LIS5 messaging standard (which is used within the LINK network for communication purposes), and Mastercard contributing to the LINK members’ costs of switching to a new supplier. On 11 April 2017, this remedy package was accepted by the CMA in lieu of reference.32 III. Insurance The most important development in insurance in the Relevant Period has been the Commission’s review of the Commission Regulation (EU) No 267/2010 (i.e., the Insurance Block Exemption Regulation or IBER) which covered two main areas (certain types of information exchange and co-(re)insurance pools subject to certain conditions). Following a thorough – two years and a half long – review process (with a number of studies33 commissioned and a number of documents34 produced), the Commission has decided not to renew IBER, coherently with a policy of progressively phasing out the utilisation of sector specific block exemptions. Until 2017 insurance was in fact one of only three sectors benefiting from such a special regime: the other two being liner shipping agreements/consortia35 and motor vehicles (for categories of vertical agreements and concerted practices).36 Despite recognising an enhanced need for collaboration in the insurance sector for arrangements related to joint compilations, tables and studies (i.e., information exchange), the Commission considered that the Horizontal Cooperation Guidelines37 (HCGs – entered into force in 2011 – one year after IBER) offered sufficient guidance for the purpose of self-assessing the legality of this type of cooperation.38 In particular, HCGs have similar principles compared to IBER insofar as they both black-list any information sharing on prices, are concerned about third-party foreclosure and concur that public available and aggregated data are less problematic from a competition perspective. Paras 77 to 94 of the HCGs recognise that information sharing may enable market participants to ‘make better-informed individual choices in order to adapt efficiently their strategy to the market conditions’39 and incentivise consumers to limit their risk exposure.40 On the other hand, information sharing between competitors may have anticompetitive effects: namely, collusion on prices and/or the facilitation of a collusive outcome and, if not accessible, foreclosure of third parties. The renewal of the IBER for co-(re)insurance pools was also not considered by the Commission as appropriate because of their limited use and relevance,41 concrete risks of misapplication (mostly due to a complex definition of pools, which was considered quite detached from market realities/dynamics) and the fact that less restrictive alternatives existed for co(re)insuring risks (potentially at more competitive conditions). The heterogeneity of co(re)-insurance arrangements militated in particular against the IBER renewal because such an exceptional legal instrument presupposes that the arrangements in question are sufficiently homogenous with effects for consumers being reasonably predictable in general terms. The Commission therefore concluded that ‘the expiry of the IBER would finally establish a level playing field not only between the insurance sector and other parts of the economy. It would in particular also level the playing field between pools that are set up by insurers (subject to the IBER) and other pools that are set up by brokers or by the policyholder (‘ad hoc’ agreements). The more frequent form of co(re)insurance is in fact co(re)insurance agreements on the subscription market which has, however, not been block exempted in the IBER’.42 The Commission suggests that the part of the HCGs dealing with joint production/distribution agreements (paras 162 to 182) may contain guidance which can assist (re)insurers carrying out the required self-assessment of their co(re)insurance agreements. IV. Capital markets The most important developments in capital markets in the Relevant Period were the Commission’s decision against Crédit Agricole, HSBC and JPMorgan Chase for the Euro Interbank Offered Rate (EURIBOR) cartel (an hybrid settlement case)43 and the General Court’s Icap judgment44 coming out of the Yen interest rate derivatives (YIRD) cartel (another hybrid settlement case)45 as well as two merger control prohibitions in financial infrastructure markets: one at EU level (Deutsche Börse/London Stock Exchange Group) and one at UK level (Intercontinental Exchange/Trayport). A. Article 101 TFEU decisions/judgments On 7 December 2016, the Commission fined Crédit Agricole, HSBC and JPMorgan Chase a total of over €485 million for their participation in the so-called EURIBOR cartel.46 The Commission found that traders had been in regular contact through corporate chat-rooms or instant messaging services and had exchanged confidential and sensitive information about their trades and strategy, with the aim to manipulate EURIBOR rates which are used as a pricing component for euro interest rate derivatives. Crédit Agricole, HSBC, and JPMorgan Chase have now each challenged the decision before the General Court.47 They argue inter alia that the conduct in question did not pursue the object of manipulating EURIBOR rates and that the Commission erred in finding that the conduct amounted to a restriction of competition by object under Article 101(1) TFEU. Interestingly, each appellant also argues that, in what was a ‘hybrid settlement case’, the Commission has acted contrary to the fundamental principles of EU law, good administration, the presumption of innocence, and the applicants’ rights of defence, by having pre-judged the case against them in the way it applied the settlement process. On 4 February 2015, the Commission fined Icap €14.9 million for facilitating six of the seven bilateral infringements concerning YIRD.48 Icap – an inter-dealer broker and provider of post-trade services – distributed to banks daily quotes showing available volumes/prices (to facilitate the conclusion of agreements) and a spreadsheet with quotes for, or ‘predictions/expectations’ of, the daily JPY LIBOR rates (to assist panel banks in the calculation of their rate submission). Icap was held liable because it facilitated the relevant infringements, by disseminating misleading information (on JPY LIBOR rates), and using contacts with several JPY LIBOR panel banks that did not participate in the infringements with the aim of influencing their (JPY LIBOR) submissions as well as by serving as a communications channel between a trader of Citigroup and a trader of RBS, enabling the anticompetitive practices between them. Icap was held liable to have infringed Article 101 TFEU although it was not active in the same relevant market as the cartelists (trading of YIRDs) and was thus unable to directly benefit from the anticompetitive agreement between them to mutually restrict the freedom of action in that market. Icap lodged its action for annulment to the General Court in April 2015. A few months later, the Court of Justice of the European Union confirmed that facilitators can infringe Article 101 TFEU in AC-Treuhand.49 Notably, the Court of Justice of the European Union went against the opinion of AG Wahl who had argued that to be party to an anticompetitive agreement in the sense of Article 101(1) TFEU there has to be a direct link between the undertaking’s economic activity and the market in which the anticompetitive behaviour takes place. The Court of Justice of the European Union in particular held that Article 101 TFEU ‘refers generally to all agreements and concerted practices which, in either horizontal or vertical relationships, distort competition on the common market, irrespective of the market on which the parties operate, and that only the commercial conduct of one of the parties need be affected by the terms of the arrangements in question’.50 The Commission has to prove that the ‘facilitator’ ‘intended to contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk’.51 In its judgment of 10 November 2017, the General Court followed the AC-Treuhand facilitation test and conducted a thorough assessment of all available evidence to determine in particular if Icap was aware, or could reasonably have foreseen, that the requests addressed to it by certain banks ‘were not effected in the sole interest of its interlocutor, but were the result of collusion between the banks concerned’.52 It found that Icap was aware of the role played by the relevant banks in three out of four bilateral infringements (annulling the part of the decision finding that Icap participated in the UBS/RBS 2008 infringement). In relation to all four infringements the Commission was correct in finding that Icap: – contributed to the common objectives of the banks as Icap influenced, in particular by altering the spreadsheet, the level of the rate submissions of certain banks which were members of the JPY LIBOR panel. The alteration of those rates would have had a much lesser probability of success if only two banks aligned the submissions,53 and – intended to contribute because: (i) it knew (a) of the existence of collusion between the banks concerned and that (b) its conduct had the objective of facilitating the manipulation of the rates by influencing panel submissions in the directions desired by the banks (ii) of the very high degree of complementarity between the conduct of the banks concerned and that of Icap.54 Icap argued that the facilitation test is ‘too broad and a novelty’ and breaches the principle of legal certainty but the General Court citing AC-Treuhand considered that Icap should have expected, if necessary after taking appropriate legal advice (as ‘expected to take special care in evaluating the risk’ of their professional activities), its conduct to be declared incompatible with the EU competition rules (in light of broad scope of ‘agreement’ and ‘concerted practice’ in the case law and the fact that its role in the infringement was, differently from what Icap claimed, the same or as significant as that attributed to AC-Treuhand).55 It would seem as if the General Court by the reference to the ‘special care’ is suggesting that the degree of foreseeability (of the conduct being in violation of competition laws, in adherence with the principle of legal certainty) may differ depending on the type of company. In relation to duration of the infringement, the Commission relied on the classification of the infringements as single and continuous because it considered it artificial to split up regular contacts that occurred at intermittent periods (based on the needs of the individual participants) into individual instances of infringements of a few days’ duration (on the ground that the JPY LIBOR rate-setting process occurs on a daily basis). The infringement is not considered as interrupted even if, in relation to a specific period, the Commission has no evidence of the participation in that infringement, provided the undertaking participated in the infringement prior to and after that period and there is no proof or indication that the infringement was interrupted.56 The General Court held that a period with no evidence which separates manifestations of infringing conduct is relevant for the question as to whether there was a single and continuous infringement. The question of how long such a period needs to be for the conduct to be regarded as interrupted cannot be determined in the abstract. It depends on the context/market.57 In the present case of daily instances of infringements, a seven week gap was considered enough for an infringement to be interrupted or come to an end (but a three week gap would not have been sufficient). The General Court clarified that an infringement may be categorised as repeated if—as in the case of a continuing infringement—there is a single objective pursued before/after the interruption (and the Commission in those case has the discretion of not imposing a fine for the period during which the infringement was interrupted). The General Court overturned the duration of three out of the four bilateral infringements. As mentioned above, the YIRD decision concerned a hybrid settlement case as all participants but Icap had settled. Icap argued that the wording of the 2013 settlement decision against the banks provided evidence that the Commission had breached the principles of presumption of innocence and good administration with regard to Icap. The General Court agreed that, on the one hand, the Commission had breached the presumption of innocence by making reference in that decision (even if only in the ‘Description of Events’ section) to Icap ‘facilitating’ the infringement because its stance on Icap’s participation in unlawful conduct was clear from how it presented Icap’s involvement (‘the legal classification … could be easily inferred’).58 While the Commission is entitled to adopt a hybrid settlement procedure, it must do so in a way that is compatible with the principle of the presumption of innocence for non-settling parties which may practically mean adopting (the settlement and infringement) decisions on the same date. On the other hand, the General Court made clear that the breach of the presumption of innocence by the 2013 decision cannot have had a direct impact on the legality of the 2015 decision ‘in view of the separate and independent nature of the proceedings which gave rise to those two decisions’.59 However, the General Court considered whether such breach meant that the Commission lacked objective impartiality (and therefore breached the principle of good administration) and concluded that that was not the case because the decision was properly supported by evidence. This outcome is particularly interesting as it appears to suggest that an infringement of a fundamental legal principle, such as the presumption of innocence, does not necessarily affect the validity of a decision. Finally, in relation to fines, the Commission departed from the 2006 Fining Guidelines60 because taking into account the value of sales (brokerage fees) would not have reflected the gravity and nature of the infringement as Icap is not active on the YIRD market. The General Court found that while the reasons chosen to depart from the methodology can be sufficiently inferred from the decision, the Commission failed to explain the alternative method (including the reasons for choosing it) and, accordingly, it annulled the fine imposed on Icap as the contested decision is vitiated by insufficient reasoning. The Commission challenged the judgment in particular insofar as it annuls the Icap’s fine allegedly imposing a stricter obligation on the Commission to motivate in more detail the methodology used in calculating fines imposed for breaches of Article 101 TFEU, especially when applying point 37 of the Fining Guidelines. B. Merger control cases As regards merger control, in the Relevant Period there have been two notable prohibition decisions in financial infrastructure markets: one at EU and one at UK level. On 29 March 2017, the Commission prohibited the Deutsche Börse (DB)/London Stock Exchange Group (LSE)61 transaction because it would have led to a significant impediment of effective competition (SIEC) in a number of markets concerning the trading, clearing, settlement and custody and collateral management of bonds, repurchase agreements and derivatives. In paras 22 to 73 of the decision, the Commission provides an interesting description of the specific features of financial infrastructure markets which are relevant from a merger control perspective, distinguishing in particular their two-sided ‘matrix’ structure and the key features of the markets. As for the former, one dimension is the asset class (equities, bonds, repos and derivatives – where ‘demand is heavily focused’) and the other one the value chain (listing, trading, clearing, settlement, custody and, under certain circumstances, collateral management – where ‘there are commonalties along the value chain from a supply-side perspective’).62 Services in the value chain are either provided on an integrated basis (by vertically integrated financial markets infrastructure providers – in vertical silos, as DB) or on a standalone basis (in ‘open model’ as operated by LSE).63 Exchanges compete in offering bundles of services (or integrated services) when (at least) two complementary services need to be purchased and customers are limited in their choices for such services (e.g., trading and clearing of exchange traded derivatives (ETDs)). Bundle-to-bundle competition can potentially lead to horizontal effects even if parties do not control all service components. This has implications for market definition and merger control assessment: for example, ETDs trading and clearing services form part of one market (as all ETDs under MiFID II and EMIR64 must be cleared by a central counterparty or CCP) and there is competition between bundles of trading and clearing services. On the other hand, over-the-counter (OTC) derivatives trading and clearing services are in two separate markets as customers have multitude of options on: (i) where and how to trade and, depending on their choice of trade executions, (ii) where, and in some cases even whether, to clear. As regards the key features of financial infrastructure markets, strong network effects (participants tend to concentrate their activities on a single venue because higher liquidity means better bid-ask spreads for trading and greater ability to net offsetting positions for clearing) and economies of scale and scope (average costs decline as platforms are more liquid because of high fixed costs and low variable costs) translate into specific market structures with high market shares of incumbents. They tend to have market power and a first mover advantage (because once liquidity builds up, further liquidity is attracted) and operate in markets with high barriers to entry. Nonetheless, there is still some competition and incumbents are spurred to innovate to keep their prominent market positions, mostly because of entry threats, as there are often entry attempts, particularly in large markets. The differentiated (sell-side/buy-side) customer base may have implications in terms of the relevance of home bias (for smaller buy-side customers), the degree of price sensitivity, general trading behaviour and preferences for the execution environment (e.g., buy-side customers prefer trading in exchanges). Finally, the regulatory framework shapes the markets at different levels of the value chain by seeking to mitigate network effects introducing competition between infrastructure providers and changing the drivers in the industry. As regards the substantive assessment, in bonds (where most transactions are uncleared) the transaction would have created a de facto monopoly in the EEA-wide market for CCP clearing of bonds (where LSE had 90–100 per cent market share and the only other competitor of any significance – Eurex with 0–5 per cent – would have been eliminated). Repurchase agreements (or repos) are financing transactions in which securities are used as collateral for borrowing cash (cash-driven) and cash is used as collateral for borrowing securities (securities-driven). Repos can be distinguished in: – Non-triparty (bilateral) or triparty (where a triparty agent provides collateral management services, valuing/substituting the collateral on an ongoing basis) which are in separate markets because in triparty repos all parties are cash-driven (and prefer them) while in non-triparty repos one party may be security-driven; – those traded on automatic repo trading systems (‘ATS’) or those traded bilaterally, through voice brokers or directly, which are in separate markets for liquidity, maturity and collateral reasons; and – cleared (D2D/ATS) or non-cleared (D2C/bilateral), which are in separate markets because some types of repos cannot be cleared by a CCP, of CCP clearing benefits (netting) and the fact that for most customers going uncleared is not a substitute. The transaction would have led to a SIEC on the EEA-wide markets for ATS traded and CCP cleared non-triparty repos and for ATS traded and CCP cleared triparty repos because in the: – former, LSE CCPs clear 100 per cent of all ATS traded (on MTS, part of LSE, BrokerTec and tpRepo) non-triparty repos and DB is the only competitor with the integrated model (trading and clearing via Eurex Repo that had a ‘1.8 per cent’ market share); and – latter, LSEG recently and successfully entered the clearing space and form part of the only competitor bundle (which includes MTS (LSE) or BrokerTec at trading level, LCH (LSE) at clearing level and Euroclear at collateral management level) faced by DB which has 90–100 per cent in a vertical silo (trading/clearing/collateral management). In post-trade services, the transaction would have led to a SIEC in the EEA market for international settlement and custody services (delivery of the security in exchange for payment and safe keeping services) provided by International Central Securities Depositaries (ICSDs) and global custodians in relation to EEA fixed income securities. This is because the merged entity would have had the ability and incentive to: (i) divert cleared fixed income transaction feeds (an important input for supplying services) from its CCPs (as CCPs have a key role in deciding where a given transaction is settled and DBAG monopolises bonds/repos clearing) to its ICSD (Clearstream); and (ii) increase costs and/or degrade conditions at which Euroclear can provide services (Eurex is the only other ICSD in EEA and competing fiercely on price/innovation with Clearstream, unlike global custodians – JPM and BNY Mellon – which are not significantly active in fixed income). As regards the EEA market for collateral management (managing and optimising the use of assets provided as collateral in different types of transactions), the merged entity would have had the ability and incentive to foreclose competitors by diverting transactions feeds and requiring customers to post collateral at Clearstream (as CCPs decide where collateral/margin needs to be posted). Finally, in the EEA market for trading and clearing single stock equity derivatives, the transaction would have led to a SIEC as the merged entity would have the incentive to leverage its market power at clearing level by fully or partially foreclosing Euronext, that relies on LCH’s clearing services, to eliminate competition at trading level. On 17 October 2016, the CMA prohibited the Intercontinental Exchange (ICE)/Trayport transaction because it would have led to a substantial lessening of competition (SLC) in the energy trading technological infrastructure sector (more specifically in the supply of trade execution and trade clearing services to energy traders in the EEA). ICE is a global operator of derivatives exchanges and clearinghouses and the largest exchange active in European utilities trading. Trayport supplies software technology to traders, trading venues (brokers and exchanges) and clearinghouses. Its products include in particular a front-end trading screen and aggregation engine (Joule) which aggregates prices from broker and exchange venues and is used to check prices and execute trades of energy commodity derivatives OTC and on some exchanges. ICE did not notify the (implemented) transaction and the CMA asserted jurisdiction because the share of supply test65 was considered to be met in light of the parties’ overlap in the supply of front-end access services to enable energy trading in the UK (ICE has WebICE giving access to its exchanges for price discovery and execution). The CMA noted the importance of network effects, innovation and first mover advantage as well as the high barriers to entry/expansion in the markets and found that Trayport’s platform is ‘extremely important’ to the success of trading venues and clearinghouses because they rely on Trayport to access traders and generate liquidity. In contrast, ICE is the only venue with a front-end screen with significant penetration among traders (some 44 per cent vis-à-vis Trayport’s 89 per cent). Therefore, ICE’s rival venues (and, to a lesser extent, clearinghouses) are dependent on Trayport to compete effectively with ICE. Although the merger was scrutinised by the CMA on the basis of the (horizontal) share of supply test, the theories of harm are vertical in nature.66 The CMA concluded that post-merger ICE would have had the: – ability to foreclose rivals as it could stop supplying rivals, raise costs, deprioritise software development and delay listing of new products on the platform; and – incentive to partially67 foreclose rivals because Trayport aggregation software offers significant value to traders in case of fragmented liquidity between multiple competing venues and clearinghouses while ICE aims to concentrate liquidity on its own exchange and clearinghouse. The effects of a foreclosure strategy would be the loss of rivalry and potential increase in fees or degrading of terms and reduction in innovation in the market. The CMA also ordered the unwinding of a post-transaction agreement signed between ICE and Trayport for displaying additional ICE products on Joule and setting up an ICE link to its clearinghouse on Joule. The CMA held that such agreement (which was entered into only a few days after the opening of phase two and without checking with the CMA first) should not have been part of the counterfactual because it was unlikely it would have been entered into on the same terms if Trayport was not part of ICE. The CAT upheld68 the CMA decision. As regards the intensity of review, the CAT cited its judgment in BAA69 where it found that ‘it is not the function of the Tribunal to trawl through the long and detailed [merger] reports of the [CMA] with a fine-tooth comb to identify arguable errors. Such reports are to be read in a generous, not a restrictive way’. The CAT found that the CMA was entitled to conclude that foreclosure by ICE was likely to benefit ICE in the form of shifts in liquidity to the advantage of ICE (even if it was unclear when and where those shifts would occur). The argument that ICE may be deterred from pursuing a partial foreclosure strategy because it may constitute an abuse of dominance was held to be irrelevant. The CAT also held that the CMA reached a rational decision in excluding the new agreement from the counterfactual but the CAT quashed that part of the report because it failed to provide ‘adequate and intelligible reasons’ and remitted it to the CMA to reconsider whether or not the new agreement had to be unwound.70 The CMA did so and on 7 July 2017 ordered to end the commercial agreement otherwise the loss of competition would not be comprehensively remedied. V. Conclusion As illustrated above, in the Relevant Period financial services have been subject to several interesting competition law developments. One that is perhaps worth singling it out is the importance of the counterfactual in Article 101 TFEU cases, as vividly illustrated by the UK Visa and MasterCard court cases. The judgments diverged considerably not only because of the complexities of the underlying arrangements/services but also for the different views taken by the judges in relation to the most appropriate counterfactual under the circumstances. This may prompt parties to consider more closely the relevance of the counterfactual in particular when assessing the effects on competition of certain practices. This is because legal and factual arguments concerning counterfactual(s) may well be decisive for the outcome of a case, even if not in payment services or two-sided markets. Footnotes 1 Case SA.34720, Commission decision of 18.7.2017 on the State Aid SA.34720 - 2015/C (ex 2013/N) implemented by Denmark, Aid for the restructuring of Vestjysk Bank. See also the decision in Case SA.34423 of 30 March 2012. 2 Case SA.47702, Commission decision (EU) 2018/119 on State Aid of 18 September 2017—United Kingdom, Alternative package to replace the commitment for the Royal Bank of Scotland to divest the Rainbow business. 3 These figures reflect the updated alternative package as proposed by the UK on 28 July 2017 to the Commission after the consultation period. 4 CMA, Retail banking market investigation, Final Report, 9 August 2016. 5 In relation to personal customers, the terms of reference included only the supply of personal current accounts, including overdrafts. In relation to SMEs, the terms of reference were broader and included business current accounts and lending products (excluding insurance, merchant acquiring, hedging, and foreign exchange products). 6 The CMA considered barriers to access and assess information on PCA charges and service quality mostly due to complex and non-transparent pricing structures (requiring detailed knowledge of account usage) and to very limited availability of quality of service information. 7 These are RBS, Lloyds, Barclays, HSBC, Santander, Nationwide, Danske, BoI, and AIB. 8 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC. PSDII was devised to help create a more integrated and efficient European payments market, develop a level playing field for payment services providers, make payments safer and more secure, and protect consumers. 9 Pursuant to Article 27 Regulatory Technical Standards, banks must implement and open interface which will enable FinTech companies to (i) identify themselves towards the bank, (ii) communicate securely to request and receive information on designated payment accounts and (iii) initiate payment orders. 10 Commission MEMO/17/3761. 11 Bacs is the automated clearing system allowing credit and debit payments between bank accounts. 12 The CMA had considered setting a regulated upper limit on the Monthly Maximum Charge but decided not to do so because introducing a regulated cap would have run the risk of validating a particular price level and of incentivising banks to set the cap at the upper limit, thereby effectively reducing competition in unarranged overdraft fees. 13 Multilateral Interchange Fees are fees charged by a cardholder’s bank (the ‘issuing bank’) to a merchant’s bank (the ‘acquiring bank’) for each sales transaction made at a merchant outlet with a payment card. 14 In 2007, the Commission issued an Article 101 TFEU infringement decision against MasterCard’s MIF applicable to cross-border payment card transactions with MasterCard and Maestro consumer debit and credit cards in the European Economic Area. MasterCard ultimately committed to reduce the EEA cross-border MIF to 0.30 per cent. Similarly, following the expiry of an exemption decision in December 2007, the Commission opened proceedings against Visa, which covered all the consumer MIFs directly set by Visa Europe. Visa Europe committed to reduce the maximum weighted average MIF for consumer debit cards for cross-border transactions and national transactions in those EEA countries where it sets the MIF directly to 0.20 per cent. These commitments were made binding by the Commission in 2010. Moreover, Visa and MasterCard’s inter-regional MIFs are currently subject to investigations by the Commission. 15 See Court of Justice of the European Union, C-382/12P, MasterCard v Commission. 16 The cases concern the question whether the respective UK MIFs violated competition law (whereas the Commission decisions concern EEA or intra-regional MIFs). 17 Competition Appeal Tribunal, Case 1241/5/7/15 (T) Sainsbury’s Supermarkets Ltd v MasterCard Incorporated and Others, [2016] CAT 11, judgment of 14 July 2016. 18 High Court, Asda Stores Ld & Ors v MasterCard Incorporated & Ors [2017] EWHC 93 (Comm), judgment of 30 January 2017. 19 The underlying counterfactual is considered to be ‘asymmetric’ as it is based on the notion that MasterCard’s UK MIF is anticompetitive, whereas Visa’s UK MIF, despite the similarities, would continue to be legal and thus not be subject to any changes. 20 High Court, Sainsbury’s Supermarkets Ltd vs Visa Europe Services LLC and Others, [2017] EWHC 3047 (Comm), judgment of 30 November 2017. 21 High Court, Sainsbury’s Supermarkets Ltd vs Visa Europe Services LLC and Others, [2018] EWHC 355 (Comm), judgment of 23 February 2018. 22 The judgment is outside the Review Period, but added for completeness. See Sainsbury’s Supermarkets Ltd v MasterCard Incorporated and Others, Asda Stores Ltd and others v Mastercard Incorporated and others and Sainsbury’s Supermarkets Limited v Visa Europe Services LLC, Visa Europe Limited and Visa UK Limited, [2018] EWCA 1536 (Civ) (4 July 2018). 23 We are not aware of any prohibition decisions that involved payment services in the Relevant Period. 24 Although this decision is technically outside the Relevant Period it has been reported because it is relevant and the previous survey briefly mentioned it (on the basis of a press release). 25 Case M.7873 – Worldline/Equens/PaySquare, decision of 20 April 2016. 26 Case M.7873 – Worldline/Equens/Paysquare, approval of BNPP (in conjunction with SIX) as purchaser of the PaySquare Divestment Business, decision of 14 March 2017. 27 Case M.8258 – Advent International/Morpho, decision of 19 April 2017. 28 CMA, ME/6638/16, Anticipated acquisition by Mastercard UK Holdco Limited of VocaLink Holdings Limited – Decision on relevant merger situation and substantial lessening of competition of 30 January 2017. 29 The Faster Payments Service (FPS) enables near ‘real-time’ payments between bank accounts within the UK. LINK is an ATM network. 30 See PSR MR15/2.3 – Final report: market review into the ownership and competitiveness of infrastructure provision of July 2016. 31 An interesting point is that the PSR had proposed in its market review a divestiture remedy according to which the four largest shareholders of VocaLink should divest partially or in full of their interests in VocaLink. The sale of VocaLink to Mastercard anticipated this proposed remedy. 32 CMA, ME/6638/16, Anticipated acquisition by Mastercard UK Holdco Limited of VocaLink Holdings Limited – Decision on acceptance of undertakings in lieu of reference of 11 April 2017. 33 Study on co(re)insurance pools and on ad-hoc co(re)insurance agreements on the subscription market (July 2014 – EY Report); Different forms of cooperation between insurance companies and their respective impact on competition (August 2016); and Switching of tangible and intangible assets between different insurance products (August 2016). 34 See, in particular, the Commission Staff Working Document (SWD(2016) 62 final) accompanying the Report to the European Parliament and the Council of 17 March 2016 and the Impact Assessment Report/SWD (HT.4012 - IBER - SEC(2016) 536) (IBER Impact Assessment). 35 Reg 906/09 OJ 2009 L256/31, valid until 25 April 2020. 36 Reg 461/10 OJ 2010 L 129/52, valid until 31 May 2023. 37 Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements, 2011/C 11/01. 38 Insurance Europe identified approximately 130 compilations (93 used for the calculation of net premiums), tables and studies compiled by national associations of insurers in 11 Member States. 39 HCGs, para. 89. 40 HCGs, para 97. This is because insurers can keep track of past behaviour and identify lower risks customers that may benefit from lower prices. 41 Only 46 EU pools were identified (as falling within the narrow IBER definition– i.e. and inter alia ‘set up by insurers’ and not brokers and to the exclusion of any ad hoc co(re)insurance agreements) by the EY Report (supra footnote 30), clustered in six Member States and nearly all with a domestic scope. The relevance was further limited by the fact that the IBER does not apply if risks are not insurable absent the pool (as Article 101(1) TFEU does not apply in that case) and if the pool has more than 20/25 per cent market share. 42 IBER Impact Assessment, (supra footnote 31), para. 133. 43 On 4 December 2013, the Commission issued a settlement decision against Barclays, Deutsche Bank, RBS and Société Générale. 44 Case T-180/15 – Icap plc, Icap Management Services Ltd, and Icap New Zealand Ltd v the European Commission, judgment of 10 November 2017. 45 Case AT.39861 – Yen Interest Rate Derivatives. On 4 December 2013, the Commission issued a settlement decision finding that UBS, RBS, Deutsche Bank, Citigroup and JPMorgan as well as broker RP Martin participated in the period 2007 to 2010 in seven distinct bilateral infringements lasting between 1 and 10 months relating to YIRDs. Icap chose not to settle and, accordingly, the Commission followed the ordinary procedure vis-a-vis Icap. 46 AT.39914 – Euro Interest Rate Derivatives – Commission decision of 7 December 2016. 47 General Court, Case T-105-17, HSBC Holdings and Others v Commission, action brought on 24 March 2017; Case T-106/17, JPMorgan Chase and Others v Commission, action brought on 17 February 2017; Case T-113/17 Crédit Agricole and Crédit Agricole Corporate and Investment Bank v Commission, action brought on 20 February 2017. 48 AT.39861 – Yen Interest Rate Derivatives – Commission decision of 4 February 2015. 49 Court of Justice of the European Union, Case C-194/14 – AC Treuhand AG v the European Commission, judgment of 22 October 2015. 50 Id. at par. 35. 51 Id. at par. 30. 52 Case T-180/15 – Icap (supra footnote 41), par. 119. 53 Id, par. 171. ‘Icap had a key role in the implementation of those infringements by influencing some of the JPY LIBOR panel submissions in the direction desired by the banks concerned’. 54 Id, par. 180 and 181. The General Court did not accept Icap’s argument that Icap’s intention/desire was to satisfy the request of a trader/customer holding that that argument is based on a confusion between the motives of Icap and the knowledge that its conduct had the objective of facilitating the manipulation of the rates. 55 Id, par. 196 and 197. 56 Id, par. 218. 57 Id, par. 220. 58 Id, par. 260. 59 Id, par. 269. 60 Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (2006/C 210/02). Par. 37 makes clear that a departure from the normal fining methodology can be justified by ‘the particularities of a given case or the need to achieve deterrence in a particular case’. 61 Case No M.7995; Commission decision of 29 March 2017. 62 Id., par. 24. 63 DB and LSE own clearing houses but only LSE (LCH) provides (merchant) clearing services to third-party trading venues while DB (Eurex Clearing) only provide services to its own trading venue. 64 Directive 2004/39/EC on markets in financial instruments (OJ L 145, 30.4.2004) and Regulation No 600/2014 on markets in financial instruments ‘MiFIR’ (OJ L 173, 12.6.2014) Directive 2004/39/EC, OJ L 145, 30.4.2004. 65 The share of supply test is satisfied when the merged entity supplies 25 per cent or more of goods or services of any description and there is an increment in such share as a result of the merger. In this case the test was held met because the merged entity would have had a share of supply of 80–90 per cent with 70–80 per cent increment. 66 The horizontal overlap on front-end access services was not considered as problematic because of the mixed evidence on pre-merger constraints and the fact that there was not significant evidence that customers would have switched between ICE and Trayport for the supply of front-end access services in response to a price increase (highlighting the clear difference between the concepts of relevant market and share of supply). 67 The foreclosure is partial because a full foreclosure strategy would lead to revenues loss and weaken network effects. 68 CAT judgment of 6 March 2017 – Case Numbers: 1271-1272/4/12/16. 69 BAA Ltd v Competition Commission [2012] CAT 3, par. 8. 70 The CAT noted that remedies can be implemented to directly or indirectly remedy the SLC: in this case the ‘direct measure’ taken to remedy the SLC is the full divestment of Trayport, while the CMA report provided no articulation as to why the requirement to unwind the new agreement was an ‘indirect measure’. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
TI - The Application of European Competition Law in the Financial Services Sector
JF - Journal of European Competition Law & Practice
DO - 10.1093/jeclap/lpy061
DA - 2018-12-01
UR - https://www.deepdyve.com/lp/oxford-university-press/the-application-of-european-competition-law-in-the-financial-services-FHUALV9usT
SP - 604
VL - 9
IS - 9
DP - DeepDyve
ER -