On May 20, 2021, the Commission issued a decision fining several banks for participation in an alleged cartel in European government bonds (“EGB”) trading. The Commission decision found that seven investment banks (Bank of America, Natixis, Nomura, UBS, UniCredit, RBS, and WestLB (now called Portigon)) participated in an alleged collusive scheme aimed at distorting competition in purchasing and trading EGBs. EGBs are financial instruments issued on the primary market for the purposes of raising debt capital by the governments of the Eurozone Member States. Once bought by “primary dealers” in primary market auctions, EGBs are traded on the secondary market among investors and financial institutions.
A group of traders, operating in “multilateral chatrooms,” allegedly exchanged commercially sensitive information, including on their prices and volumes, on their bidding strategy, and on trading parameters. This conduct took place between 2007 and 2011, thereby covering the heights of the 2008 financial crisis.
Although the Commission found that seven banks participated in the cartel, it only fined UBS (€ 172 million), Nomura (€ 129 million), and UniCredit (€ 69 million) for a total of € 371 million after discounts. Bank of America and Natixis avoided fines because the statute of limitations had expired for their participation in the infringement. Natwest applied for and received immunity, whereas WestLB avoided a fine since it did not have any company-wide net turnover in the year preceding the fine and the maximum fine the Commission can levy is 10% of such turnover.
The EGB decision comes only a month after the Commission cartel decision relating to the secondary trading market of Supra-sovereign, Sovereign and Agency (“SSA”) bonds denominated in US Dollars, where the Commission fined Bank of America, Credit Agricole, and Credit Suisse € 28 million (Deutsche Bank escaped fines through immunity).
These cases reaffirm the Commission’s focus on cartel enforcement in the financial sector, sending “a clear message that the Commission will not tolerate any kind of collusive behavior,” in the words of Executive Vice-President Margrethe Vestager. Yet, despite active enforcement in this area over the last decade, these two decisions relating to bonds stand out: they are the only two major decisions adopted in this sector by the Commission that have resulted from the normal procedure.
Previous financial cases have been settled by a majority of the parties at issue. These two decisions may therefore mark the start of a series of litigation in Luxembourg that will test the Commission’s approach to developing theories of harms in complex financial markets—theories that have, to date, only been tested by holdouts from settlement resolutions.
 Commission Press Release IP/21/2565, “Antitrust: Commission fines investment banks € 371 million for participating in a European Governments Bonds trading cartel,” May 20, 2021.
 Commission Press Release IP/21/2004, “Antitrust: Commission fines investment banks € 28 million for participating in SSA bonds trading cartel,” April 28, 2021.