On 10 November 2017, the European Union (“EU”) General Court (“GC”) rendered a judgment partially annulling the European Commission’s (“Commission”) decision fining a broker for its involvement in the Libor Yen interest rate derivatives cartel. The decision is interesting as it suggests that the Commission needs to carefully consider the defense rights of the companies that refuse to settle in cartel investigations when other companies decide to settle (i.e., the “hybrid” settlement procedure).

The cartel settlement procedure was introduced by the Commission in 2008. It allows for a speedier process and a reduction of the fine. In exchange of acknowledging their involvement in the cartel and their liability for the infringement, companies can benefit from a 10% fine reduction. However, when one or more parties refuse to settle, the Commission continues to investigate the parties that decided not to participate in the settlement.

Back in 2013, the Commission settled the case with most of the companies involved in the Libor Yen interest rate derivatives cartel and imposed fines totaling approximately EUR 670 million. The broker, however, decided not to participate in the settlement. Subsequently, in 2015 the Commission fined it approximately EUR 15 million for having facilitated six out of seven cartels.

Even though the broker was fined after it decided not to participate in the settlement procedure, it scored a partial victory in its action for annulment of the Commission’s decision before the GC. The GC found the Commission did not succeed in proving the broker’s involvement in one of the bilateral cartels. It also found fault with the Commission’s determination of the duration of the broker’s involvement in some of the infringements. Finally, it annulled in its entirety the part of the decision relating to the fines imposed as the Commission’s reasoning was found to be insufficient.

Additionally, the GC also stressed the importance of respecting the presumption of innocence of a party which decides not to settle in the framework of a “hybrid” settlement procedure.