A recent European Commission (EC) fining decision against UK-based broker ICAP confirms that companies which merely facilitate a cartel will be tarred with the same brush as those which actually engage in the cartel. The decision formed part of the EC’s investigation into cartels in the sector of yen interest rate derivatives (YIRD).
The EC announced its fines (totalling nearly €670 million on six participants which admitted the infringements and settled) in the YIRD cartel in December 2013. It found seven distinct bilateral infringements of competition law involving discussions among traders of various banks on certain Japanese yen (JPY) LIBOR submissions. The traders involved also exchanged, on occasions, commercially sensitive information relating either to trading positions or to future JPY LIBOR submissions.
ICAP did not settle and the EC therefore continued its investigation. In its decision against ICAP, announced 4 February 2015, the EC found that ICAP facilitated six of the seven cartels in the YIRD sector through various actions that contributed to the anticompetitive objectives pursued by the cartelists. In particular, it disseminated misleading information to certain JPY LIBOR panel banks, which were veiled as “predictions” or “expectations” of where the JPY LIBOR rates would be set. It also used its contacts with several JPY LIBOR panel banks that did not participate in the infringements, with the aim of influencing their JPY LIBOR submissions. Finally, it served as a communications channelbetween a trader of Citigroup and a trader of RBS and thereby enabled the anticompetitive practices between those companies.
ICAP was therefore fined nearly €15 million. The EU courts have previously ruled that a facilitator can expect to be fined if it knows that it is actively and deliberately contributing to a cartel. The ICAP case appears to be a natural extension of that principle by the EC.