On May 2, 2019, Advocate General Tanchev (“AG Tanchev”) recommended dismissing the Commission’s appeal against the General Court’s ruling in Icap.[1] According to AG Tanchev, the General Court was correct in holding that the Commission’s decision provided insufficient reasoning as regards the determination of the fines imposed on Icap.

On February 4, 2015, the Commission fined broker Icap (now NEX International Ltd) €15 million for facilitating a cartel in the Yen Interest Rate Derivatives (“YIRD”) market,[2] as reported in our Q2 2017 newsletter. As a broker, Icap’s sales from YIRD activities were limited to its brokerage fees. The Commission found that these sales did not sufficiently reflect the gravity and nature of Icap’s infringements. The Commission consequently departed from its fining guidelines and used—but did not disclose—an alternative method to calculate the fine. The decision only provided a general assurance that the basic amounts reflected the gravity, duration, and nature of Icap’s conduct.

On appeal, the General Court found that the decision failed to adequately explain the relevance and weighing of the factors determining the fine. Icap was therefore unable to understand the alternative method used by the Commission, nor was the General Court able to review it. On appeal, the Commission claimed that the alternative method was a mere internal calculation, and that disclosure would be “detrimental to the Commission’s ability to determine adequate fines so as to achieve sufficient deterrence.”[3]

AG Tanchev disagreed. The mere mention of the gravity, duration, and nature of the participation is insufficient, in particular in a situation where the Commission departs from its fining guidelines. Drawing on the Court of Justice’s ruling in UPS,[4] reported in our January 2019 newsletter, AG Tanchev found that the Commission’s alternative method was “an important element on which the Commission based its decision.”[5] As such, it should have been disclosed to Icap during the administrative procedure as well as in the decision. This was all the more important because there were two facilitators (i.e., Icap and R.P. Martin). There was therefore a risk that the Commission might have breached the principle of equal treatment when imposing fines on Icap.

AG Tanchev’s opinion extends the reasoning from UPS, which concerned merger control, to antitrust decisions. Addressees of Commission decisions should be “placed in a position in which they can effectively make known their views as regards all elements on which the authorities intend to base their decision.”[6] This statement potentially imposes a duty on the Commission to communicate all elements on which it intends to base its decision (potentially including internal documents). The Court will have to decide whether to take such a broad approach or limit it to disclosure of alternative methods to calculate fines.

[1]      Commission v. NEX International Limited (Case C-39/18 P), Opinion of Advocate General Tanchev, EU:C:2019:359. (“Icap, Opinion of AG Tanchev.”)

[2]      Yen Interest Rate Derivatives (YIRD) (Case COMP/AT.39861), Commission decision of February 4, 2015, partially annulled by the General Court in Icap and Others v. Commission (Case T-180/15), EU:T:2017:795.

[3]      Icap, Opinion of AG Tanchev, para. 18.

[4]      United Parcel Service v. Commission (C-265/17 P), EU:C:2019:23.

[5]      Icap, Opinion of AG Tanchev, para. 48.

[6]      Icap, Opinion of AG Tanchev, para. 86.