Luxembourg (Brussels Morning Newspaper) – The European General Court upheld the decision of EU antitrust regulators which four years ago fined UBS, UniCredit, Nomura, Bank of America, Natixis and Portigon for taking part in a government bond cartel.
The Court said it
“largely confirms the decision of the (European) Commission”
But also
“moderately reduces the amount of the fines imposed on UniCredit and Nomura”.
In its decision of 20 May 2021, the European Commission found that seven investment banks – UBS, Natixis, UniCredit, Nomura, Bank of America, Portigon (formerly WestLB) and NatWest (formerly Royal Bank of Scotland) – had been involved, between January 2007 and November 2011, in a cartel in the European Government Bonds 2 (EGBs) sector.
There were fines imposed by the European Commission on Nomura, UBS and UniCredit totalling € 371 million. Bank of America, Natixis and NatWest were not penalized; in so far as concerns the former two banks, because the EU Commission’s power to put financial penalties was time-barred, and, in so far as regards the latter bank, because it had disclosed the cartel to the Commission.
Why did the EU court uphold bond cartel fines?
According to the General Court, one single and continuous infringement occurred, and the exchange of commercially sensitive information, and price-fixing arrangements, was particularly detrimental to competition to share market space and allocate customers on both the primary and secondary markets for EGBs.
Therefore, the Commission was not required to investigate or demonstrate the impact of the traders’ conduct on competition. In its ruling, the General Court emphasized that any anticompetitive behaviour by an employee will be attributed to the company to which the employee belongs. Accordingly, banks are liable for the conduct of their traders.
Bank of America and Natixis, which were not fined, had an interest in finding the infringement by the Commission, which was confirmed by the General Court. It would be possible to establish the infringement or to explain the scope of the traders’ unlawful conduct if their identification was included in the decision.
