14 November 2017

Icap v. Commission: General Court Upholds Cartel Liability Of Facilitators, But Attempts To Rein In Commission's Approach In Settlements

Shearman & Sterling LLP


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On 10 November 2017, the European Union General Court (GC) handed down its judgment in Icap v Commission.
European Union Antitrust/Competition Law
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On 10 November 2017, the European Union General Court (GC) handed down its judgment in Icap v Commission. The judgment serves as a reminder of the Commission's ability to impose liability for cartel infringements on "facilitators" as well as on the cartel's main participants, but equally draws the Commission's attention to its procedural obligations when it comes to settlement procedures, particularly in hybrid cases. The judgment also restates case law on the establishment of a "by object" infringement of Article 101(1) Treaty on the Functioning of the European Union (TFEU).


Icap, an interdealer broker and provider of post-trade services, was found liable as a facilitator of the Japanese Yen LIBOR cartel by the Commission in February 2015.1 In its decision, the Commission held that Icap facilitated six separate bilateral infringements of Article 101(1) TFEU of differing durations. By separate settlement decision in December 2013, the Commission had already found against five banks and another broker for participation in the cartel.2 Icap had withdrawn from the settlement procedure in November 2013.

The Commission found that Icap had facilitated the infringements by circulating spreadsheets of quotes related to JPY LIBOR rates to the participating banks, as well as other financial institutions who were members of the JPY LIBOR panel.3 These spreadsheets provided price and volume information and aimed to facilitate agreements between the participant and panel banks. In addition, the Commission found that Icap was, following instructions from participating banks, disseminating misleading information amongst panel banks.

In its judgment, the GC partially annulled the Commission's decision: one of the infringements was annulled in its entirety in light of the Commission's failure to produce adequate evidence of Icap's knowledge of such infringement,4 and four of the infringements were annulled in part due to a lack of sufficient evidence as to their duration.5 The fine imposed on Icap was in any case annulled in full, due to the Commission's lack of sufficient reasoning on the fine calculation in its decision.6


"Facilitation" of a Cartel as an Infringement of Article 101(1) TFEU

After the Court of Justice's judgment in AC Treuhand,7 the judgment is only the second case to deal with the question of the extent to which a third-party facilitator of a cartel can be liable for an infringement of Article 101(1) TFEU. Importantly, the judgment restates the position in AC Treuhand,8 where a consultancy firm was held liable for a cartel infringement despite its presence on a market different to that of the participants, on the basis of its essential and not merely peripheral role in organising meetings, collecting and supplying data, and acting as moderator between participants.9 As a result, the GC in Icap upheld the general proposition that an entity's active contribution to a restriction of competition will be caught even where such contribution relates to an activity outside of the market in which the cartel takes place.10

Icap argued that the Commission had incorrectly applied the "facilitation test" established in AC Treuhand and that its conduct in fact differed from the facilitator in that case. Its claims were rejected by the GC in relation to all but one of the six infringements.

As part of its analysis, the GC held that the only factors determining whether Icap could be liable as facilitator was whether it: (1) intended to contribute by its own conduct to the common objectives pursued by all participants; and (2) was aware of the actual conduct planned or put into effect by the other parties pursuing the same objectives, or that it could reasonably have foreseen such action and was prepared to take the associated risk.11

In relation to the first requirement, the GC held that from the Commission's finding of Icap's knowledge of collusion between the banks (discussed in relation to the second requirement below) and the "very high degree of complementarity" between the banks and Icap's conduct, it followed that Icap intended to contribute to the banks' common anti-competitive objective.12 The complementarity in particular was established on the basis that the alterations of the JPY LIBOR rates would have been much less likely to succeed if based solely on the coordinated submissions of the participating banks, without also involving Icap's conduct. As a result, Icap's role was "key" in influencing the JPY LIBOR panel submissions in the direction desired by the banks.13

On the second requirement, the GC held that the majority of evidence adduced by the Commission supported a finding that Icap knew of the existence of collusion between the banks, including through "unambiguous" evidence where an Icap staff member was informed by a UBS trader of an agreement made with an RBS trader.14 In one instance, Icap could, at the very least, be held to have reasonably foreseen the collusion; namely, where it received multiple requests for a reduction of the JPY LIBOR rates following an earlier disclosure of future proposed concerted actions between certain banks.15 In one infringement, however, the Commission had not adduced the necessary evidence of knowledge; here, the Court held that an internal Icap email discussing the interests of two banks at most demonstrated Icap's own view on such conduct, and not its knowledge of the broader collusion at play.16

Icap's additional suggestion to distinguish AC Treuhand was also rejected. In the GC's view, Icap should, similarly to the consultancy firm in AC Treuhand, have expected its conduct to be contrary to EU competition rules with or without specific legal advice to this effect, given that its position as a professional firm generally required Icap to take extra precaution during the course of its occupation.17

Hybrid Settlements

Icap argued that there had been a breach of the presumption of innocence and principle of good administration as a result of the Commission's issuance of the 2013 settlement decision. The GC agreed that the presumption of innocence had been breached, noting that Icap's withdrawal from the settlement procedure meant it was not provided with the necessary opportunity to present its views prior to the adoption of such decision in which the Commission had effectively found its involvement in the six infringements.18 However, the GC noted that such a finding could not impact the 2015 contested decision in light of its adoption under a different procedure.19

In addition, the GC emphasised points for the Commission to be aware of in its operation of settlement procedures. Most importantly, the judgment rejected the Commission's assertion that the efficiency of the settlement procedure demands reference to the conduct of third parties in settlement decisions where necessary to adduce the guilt of settling parties. Instead, the Court held that the settlement procedure must always be operated to be compatible with the presumption of innocence.20 The GC concluded that this approach also applied in hybrid settlements, stating that where the Commission finds that it is unable to determine the liability of settling parties without taking a view on the conduct of non-settling parties, it must take "necessary measures" allowing for the presumption of innocence to be upheld—for example, the adoption of related contested and settlement decisions on the same date.21

The GC also suggested that the principle of good administration could have been breached on the basis that the Commission's finding in the settlement decision was capable of vitiating the contested decision due to the Commission's lack of objective impartiality, but only where the contested decision would have differed in content without such lack of impartiality.22 Since the GC concluded that the Commission had in any case correctly determined the existence of an infringement "by object" in the contested decision, there was no basis on which it could be annulled by virtue of a breach of the principle of good administration.

Assessment of "by Object" Infringements

Icap also argued that the Commission had erred in characterising its conduct as a "by object" infringement. The GC rejected Icap's contention,23 recounting the case law in this area: the GC first referenced passages of the Court of Justice's judgment in Cartes Bancaires,24 which stated the by now well-known requirement for the Commission to focus on the economic and legal context of conduct, as well as the nature of the relevant goods or services and the functioning and structure of the relevant market when identifying a "by object" infringement.25 The GC went on to state, based on previous Court findings in T-Mobile,26 and Dole,27 that price information exchanges may in certain circumstances be regarded as "by object" infringements, even without a direct connection between such exchanges and subsequent price levels, or any actual anti-competitive effects on the relevant market.28

Notwithstanding this principle, the GC found that in any case the coordination of the JPY LIBOR panel submissions did have a direct effect on the levels of the "fixed" and "floating" portions or "legs" of the derivative contracts in question.29 For completeness, the GC also confirmed that the exchange of confidential information as regards the JPY LIBOR rate also amounted to an infringement "by object," given the significance of such information on the rate levels themselves.30


The judgment confirms the Commission's broad ability to impose fines on third-partymarket players for their involvement in the most severe of cartel infringements. Professional firms should therefore take a precautionary approach to their conduct, even in markets in which they do not ordinarily operate, in order to comply with EU competition law and avoid falling foul of the Article 101(1) TFEU prohibition and being subject to subsequent fines.

The finding related to hybrid settlements, by contrast, may serve as a warning to the Commission on its approach in such cases. Whilst previous court appeals in this area reinforce the Commission's discretion, particularly due to the lack of its obligation to adhere to the fine range indicated during settlement discussions as part of a later contested procedure,31 certain passages of the Icap judgment remind the Commission of its obligation to uphold procedural rights in settlement cases. The Commission is also made aware of the potential challenges to its objective impartiality when adopting settlement and contested decisions in hybrid cases a number of months apart.

The scope of these findings may be regarded as somewhat limited; although the GC held that the settlement decision infringed Icap's presumption of innocence, Icap's withdrawal from the settlement procedure meant that: (1) it was not an addressee of such decision and was administratively unable to request its annulment; and (2) the GC was unable to annul the contested decision due to its adoption under a different administrative procedure. Icap was therefore denied a positive outcome, despite the GC's finding of a procedural breach on the Commission's part.

Nonetheless, the GC's criticisms in Icap may exert pressure on the Commission to revisit the method in which it operates hybrid settlements in order to avoid any potential breach of the parties' procedural rights, including the pressure to adopt contested and settlement decisions in parallel. However, given the Commission's single instance of adopting such decisions on the same date in Animal Feed Phosphates,32 it may choose to continue to adopt these decisions at different times and benefit from previous descriptions of infringements by settling parties when later finding liability against non-settling parties. In any event, the GC's view on this issue is likely to be confirmed further in pending court appeals of non-settling parties in hybrid cases; Scania in Trucks,33 HSBC, JPMorgan Chase and Credit Agricole in Euro Interest Rate Derivatives34 and Pometon in Steel Abrasives.35

Finally, the GC's discussion of recent "by object" case law serves as a reminder of some of the continued broad aspects of the concept. Companies should remain aware that although Cartes Bancaires clearly obliges the Commission to undergo a detailed analysis of the legal and economic context before concluding certain conduct constitutes a "by object" infringement, this does not preclude the Commission from reaching such a conclusion where there is no direct impact on prices or an actual anti-competitive effect in the relevant market.


[1] Commission Decision in Case AT.39861 – Yen Interest Rate Derivatives, 4 February 2015

[2] Commission Decision in Case AT.39861 – Yen Interest Rate Derivatives, 4 December 2013.

[3] The member banks of such panel submit daily rate estimates that were, at the time of the 2015 decision, subsequently set and published by the British Bankers Association.

[4] Judgment of the General Court in Case T-180/15 Icap and others v Commission, 10 November 2017 ("Icap"), [145]

[5] Icap, [252]

[6] Icap, [297]-[299]

[7] Judgment of the Court of Justice in Case C-194/14 AC-Treuhand AG v Commission, 22 October 2015 ("AC Treuhand")

[8] Icap, [97] to [104]. Per [92] of Icap, Icap had in fact withdrawn certain of its arguments in relation to the relevant plea following AC Treuhand.

[9] AC Treuhand, [36] to [47]

[10] Icap, [104]

[11] Icap, [100] and [106]

[12] Icap, [180]

[13] Icap, [171] and [198]

[14] Icap, [130]

[15] Icap, [163]

[16] Icap, [142]

[17] Icap, [196]-[197]

[18] Icap, [263]

[19] Icap, [269]

[20] Icap, [264] and [265]

[21] Icap, [268]

[22] Icap, [270] to [278]

[23] Icap, [91]

[24] Judgment of the Court of Justice in Case C-67/13 CB v Commission, 11 September 2014

[25] Icap, [47]

[26] Judgment of the Court of Justice in Case C-8/08 T-Mobile Netherlands and Others v Commission, 4 June 2009

[27] Judgment of the Court of Justice in Case C-286/13 Dole Food and Dole Fresh Fruit Europe v Commission, 19 March 2015

[28] Icap, [49]-[57]

[29] Icap, [67] and [68]

[30] Icap, [75]

[31] Judgment of the General Court in Case T-456/10 Timab Industries and CFPR v Commission, 20 May 2015, upheld on appeal to the Court of Justice in Case C-411/15, 12 January 2017.

[32] Commission Decisions in Case COMP/38866 – Animal Feed Phosphates, 20 July 2010; both the settlement decision against five settling parties and contested decision against one non-settling party, Timab, were adopted on the same date.

[33] Commission Decision in Case AT.39824 – Trucks, 27 September 2017

[34] Commission Decision in Case AT.39914 – Euro Interest Rate Derivatives, 7 December 2016; appeal brought on 17 February 2017 by HSBC and JPMorgan Chase and in Cases T-105/17 and T-106/17 respectively; appeal brought on 20 February 2017 by Credit Agricole in Case T-113/17.

[35] Commission Decision in Case AT.39792 – Steel Abrasives, 25 May 2016; appeal brought on 3 August 2016 in Case T-433/16.

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