Final Report of the Hearing Officer (1)

AT.40135 – FOREX (Sterling Lads – ordinary procedure)

(2022/C 185/07)

I. INTRODUCTION

1. Three-way banana split ) Essex Express ) The FOREX case (AT.40135) concerns conduct taking place in several separate […] chatrooms relating to Foreign Exchange (‘FX’) spot trading of G10 currencies. On 16 May 2019, the Commission adopted two settlement decisions, FOREX ( ( 2 ) and FOREX ( ( 3 ) concerning conduct in certain of these chatrooms.

2. Sterling Lads This report concerns conduct in a particular chatroom, ( 4 ) , and specifically the draft prohibition decision under an ordinary procedure, addressed to Credit Suisse Group AG, Credit Suisse Securities (Europe) Limited and Credit Suisse AG (together ‘Credit Suisse’). Four other undertakings ( 5 ) are involved in parallel settlement proceedings (together the ‘Settling Parties’) and are addressees of a separate draft settlement decision ( 6 )

II. PROCEDURE

3. The investigation started after an application for a marker by [non-addressee] on 27 September 2013 under points 14 and 15 of the Notice on immunity from fines and reduction of fines in cartel cases (‘Leniency Notice’) ( 7 ) . In October 2013, [non-addressee] and [non-addressee] submitted applications for reduction of fines under the Leniency Notice. The Commission granted [non-addressee] conditional immunity on 2 July 2014. [non-addressee] submitted an application for reduction of fines under the Leniency Notice in July 2015. Between July 2014 and April 2016 the Commission sent information requests to Credit Suisse and the Settling Parties (together ‘the Parties’).

4. On 27 October 2016, the Commission initiated proceedings pursuant to Article 11(6) of Regulation 1/2003 ( 8 ) against the Parties and fixed a deadline for them to manifest their interest in engaging in settlement discussions. All Parties expressed their interest in engaging in settlement discussions. Bilateral settlement meetings with the Parties took place between 9 November 2016 and 7 February 2018.

5. On 19 February 2018, Credit Suisse informed the Commission that it would not continue its participation in the settlement procedure. The proceedings therefore became ‘hybrid’ as the Commission reverted to the ordinary procedure for Credit Suisse, in accordance with paragraph 19 of the Commission Notice on the conduct of settlement procedures, ( 9 ) while continuing with the settlement procedure vis-à-vis the Settling Parties.

III. STATEMENT OF OBJECTIONS AND FIRST ORAL HEARING

6. On 24 July 2018, the Commission issued a Statement of Objections (‘SO’) against Credit Suisse. In the SO, the Commission came to the preliminary view that Credit Suisse participated, together with the Settling Parties in a conduct infringing Article 101 TFEU and Article 53 of the EEA Agreement by exchanging commercially sensitive information within a private, multilateral chatroom with the name ‘ Sterling Lads ’. According to the SO, the participants in the Sterling Lads chatroom engaged in extensive and recurrent exchanges of certain current or forward looking information about their trading activities relating to different aspects of FX spot trading of G10 currencies, pursuant to an underlying understanding. According to the SO, the exchanges of information would also occasionally enable the traders to coordinate their activities through ‘standing down’.

7. In the SO, the Commission came to the preliminary conclusion that the conduct in which Credit Suisse engaged constituted agreements and/or concerted practices that had the object of distorting and/or restricting competition within the meaning of Article 101 TFEU and Article 53 of the EEA Agreement. Furthermore, the Commission preliminarily considered that Credit Suisse’s conduct gave rise to a single and continuous infringement between 7 February 2012 and 12 July 2012.

8. Credit Suisse was granted access to the file on 25 July 2018. The Hearing Officer did not receive any complaint or further request in relation to this access.

9. DG Competition initially granted Credit Suisse eight weeks for replying to the SO. Following an extension request by Credit Suisse, DG Competition extended the time limit by two weeks.

10. On 15 and 29 August 2018, Credit Suisse requested a further extension of two to three weeks to DG Competition, based on alleged difficulties and delays with access to the file. DG Competition rejected the request on 30 August 2018. On 4 September 2018, Credit Suisse referred the matter to the Hearing Officer pursuant to Article 9 of Decision 2011/695/EU. After examination of Credit Suisse’s arguments and in light of all the circumstances, in particular the initial time limit set by DG Competition and the size and complexity of the file, the Hearing Officer dismissed Credit Suisse’s request by decision of 12 September 2018.

11. Credit Suisse submitted its response to the SO on 4 October 2018 within the time limit. In its response, Credit Suisse requested to be heard orally. The oral hearing (‘first oral hearing’) was held on 7 December 2018. The first oral hearing proceeded smoothly and there were no procedural complaints.

IV. REQUEST BY SETTLING PARTIES TO PARTICIPATE IN THE FIRST ORAL HEARING

12. Some of the Settling Parties either inquired whether they would be invited to attend the first oral hearing or requested to be invited. The Hearing Officer at the time rejected these requests, based on: (a) the provisions of the Settlement Notice, that provides that settlement parties confirm that they do not envisage requesting to be heard again in an oral hearing; and (b) the purpose of the oral hearing under Regulation 773/2004, that is to allow parties to express their views in the Commission’s proceedings and to help the Commission reach the correct decision at the end of its proceedings.

13. The Hearing Officer also rejected a request by one of the Settling Parties to be granted access to a transcript of the first oral hearing, since oral hearings are not public (Article 14(6) of Regulation 773/2004) and recordings of hearings shall be made available to the persons that attended the hearings (Article 14(8) Regulation 773/2004).

V. REQUEST FOR FURTHER ACCESS TO THE FILE BY CREDIT SUISSE

14. On 3 November 2020, Credit Suisse addressed a letter (the ‘3 November 2020 Letter’) to DG Competition requesting access to certain information on the Commission’s file, including settlement communications between the Settling Parties and the Commission in this case and to an index of documents added to the Commission’s file since Credit Suisse was last granted access to it (the ‘index’) ( 10 )

15. On 1 December 2020, DG Competition responded to the 3 November 2020 Letter, agreeing to provide access to the documents requested by Credit Suisse, to the extent that these related (or were not unrelated) to the Sterling Lads chatroom. DG Competition did not accede to the request for the index and, following further correspondence from Credit Suisse, finally rejected this request on 9 December 2020.

16. On 23 January 2021, Credit Suisse addressed a letter to the Hearing Officer requesting access to certain documents in the Commission’s investigation file and to the index (‘the Request’). On 26 January 2021, DG Competition informed Credit Suisse that it was preparing a Supplementary Statement of Objections (‘SSO’) in the proceedings and that additional access to file and the index would be provided together with the SSO. In light of this correspondence from DG Competition, the Hearing Officer at the time informed Credit Suisse that, pursuant to Article 3(7) of Decision 2011/695/EU, he considered the Request to be premature and that he would not further deal with it.

VI. SUPPLEMENTARY STATEMENT OF OBJECTIONS AND SECOND ORAL HEARING

17. On 18 March 2021, the Commission adopted the SSO, which was notified to Credit Suisse on 19 March 2021. In the SSO, the Commission elaborated and expanded on certain elements in the SO, specifically on the economic and market context and the analysis of the evidence. Furthermore, the SSO clarified the Commission’s preliminary view that the arrangements within the Sterling Lads chatroom comprising of (i) the extensive and recurrent exchanges of information, (ii) the occasional instances of coordination and (iii) the underlying understanding, constituted separate agreements and/or concerted practices each of which are restrictive of competition by object but that, taken together, also constituted a single and continuous infringement by object of Article 101 TFEU and Article 53 of the EEA Agreement. The SSO also provided further details on the methodology for the calculation of the proxy for the value of sales that the Commission intended to use in the event that a fine were to be imposed.

18. Access to part of the file was granted via DVD on 23 March 2021 and additional access to settlement-related materials, that included settlement communications between the Commission and the Settling Parties related (or not unrelated) to Sterling Lads , was provided at the Commission’s premises between 24 and 26 March 2021.

19. The Hearing Officer received no further requests regarding access to file.

20. The initial deadline set by DG Competition for Credit Suisse to submit a response to the SSO (‘SSO response’) was 22 April 2021. On 1 April 2021, Credit Suisse wrote to DG Competition requesting an extension of this deadline by four weeks. DG Competition rejected this request on 7 April 2021.

21. On 8 April 2021, Credit Suisse addressed the Hearing Officer, requesting a four-week extension to the SSO response deadline. On 12 April 2021, the Hearing Officer, after considering the arguments made by Credit Suisse and by DG Competition, granted Credit Suisse an extension of two weeks to submit the SSO response, i.e. until 6 May 2021. Credit Suisse submitted the SSO response on that date.

22. In the SSO response, Credit Suisse requested to be heard orally. The oral hearing (‘second oral hearing’) was held on 8 June 2021 ( 11 ) . The second oral hearing proceeded smoothly and there were no procedural complaints.

VII. CONCLUSION

23. The draft decision finds Credit Suisse liable for infringing Article 101 TFEU and Article 53 of the EEA Agreement by participating from 7 February 2012 until 12 July 2012, in extensive and recurrent exchanges of current or forward looking commercially sensitive information which constitute agreements and/or concerted practices (within a wider single and continuous infringement) having the object of restricting and/or distorting competition regarding FX spot trading of G10 currencies covering the entire EEA. Compared to the SO and SSO, the draft decision does not hold Credit Suisse liable for the occasional instances of coordination or for the underlying understanding.

24. Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which Credit Suisse has been afforded the opportunity of making known its views, and I have come to a positive conclusion.

25. In view of the above, I consider that Credit Suisse has been able to effectively exercise its procedural rights in this case.

Brussels, 1 December 2021. Dorothe DALHEIMER

(1) Pursuant to Article 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

(2) OJ C 226, 9.7.2020, p. 5.

(3) OJ C 219, 3.7.2020, p. 8.

(4) Sterling Lads is the name of the […] chatroom in which the conduct in question took place.

(5) [non-addressee]; [non-addressee], [non-addressee] and [non-addressee].

(6) A separate Hearing Officer report pursuant to Articles 16 and 17 of Decision 2011/695/EU covers the settlement proceedings.

(7) OJ C 298, 8.12.2006, p. 17.

(8) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1) (‘Regulation 1/2003’).

(9) Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases (OJ C 167, 2.7.2008, p. 1) (the ‘Settlement Notice’).

(10) Credit Suisse based its request on the Order of 10 September 2019, Lantmännen v Commission, C-318/19 P(R), EU:C:2019:698 which (at an interim proceeding stage) upheld the Hearing Officer’s decision to disclose access to all settlement communications between a settling party and the Commission, preceeding the statement of objections.

(11) Due to the ongoing coronavirus pandemic, the second oral hearing was held remotely by encrypted videoconference as well as via a password protected (web streamed) virtual listening room for persons who did not need to speak at the oral hearing.