On 6 April 2016, the European Commission announced that it had reduced the fine imposed on French bank Société Générale from €446 million to €227.7 million after having revised the value of sales used to calculate the fine.

Société Générale had initially settled with the Commission under the settlement procedure, acknowledging that it had been involved in the Euribor interest-rate cartel (see VBB on Competition Law, Volume 2013, No. 12, available at www.vbb.com). Despite settling, Société Générale appealed the settlement decision on the ground that the Commission had committed a "manifest error of assessment" in calculating the fine. Specifically, Société Générale took the view that the Commission had used the wrong value of sales as a basis for calculating the fine. This was the first time a settlement decision was appealed.

Société Générale dropped its appeal after the Commission confirmed, in a rare occurrence, that it would accept the new sales figures that Société Générale had provided in February 2016 and reduce the amount of the fine accordingly.

Analysis: The Société Générale case highlights challenges of the settlement procedure

Under the settlement procedure, the Commission and the parties engage in bilateral discussions during which they discuss the scope of the infringement and factors determining the amount of the fine, which include the value of sales on which the basic amount of the fine is to be calculated. During the discussions, the Commission verifies whether an (informal) common understanding exists with the party regarding the scope of the infringement and the value of sales, after which it discloses its assessment of the range of fines to be imposed on the party concerned. At any time, the party may decide to discontinue the settlement procedure and revert to the standard procedure if the party disagrees with the Commission's assessment of the case.

In this context, the appeal lodged by Société Générale against a settlement decision was surprising. Indeed, Société Générale had been free to discontinue the settlement discussions if it had considered that the amount of the possible fine that it was facing did not correspond to its own assessment of the fine.

This case highlights challenges of the settlement procedure. In particular, due to the very nature of the bilateral settlement discussions, a party is not in a position to adequately determine whether it is treated equally as regards other parties until the final settlement decision is adopted. Based on the amount of the original fines imposed in 2013, Société Générale was put at the same level as other banks, such as Deutsche Bahn and Barclays, even though Société Générale was a smaller player on the market. This situation appears to have been the principal reason for Société Générale's appeal.

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