Final Report of the Hearing Officer – Case AT.40512 – Euro Denominated Bonds
Date: 2023-11-20
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, European Economic Area, bank, bond, control of restrictive practices, euro, exchange of information, restriction on competition, sanction (EU), trade information








C_202404630EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/4630


29.7.2024






Final Report of the Hearing Officer (1)

Case AT.40512 – Euro Denominated Bonds
(Text with EEA relevance)
(C/2024/4630)

1.   Introduction









1.


The draft decision in this case finds a single and continuous infringement of Article 101 TFEU and Article 53 of the EEA Agreement involving two undertakings, Deutsche Bank AG (‘Deutsche Bank’) and Coöperatieve Rabobank U.A. (‘Rabobank’) (together ‘the Parties’).












2.


The infringement consisted of agreements and/or concerted practices that had the object of restricting and/or distorting competition in the secondary market for the trading of certain Euro-denominated bonds. It took place between 4 January 2006 and 24 February 2016, and covered the whole of the European Economic Area (2).




2.   Investigation Phase and Settlement Procedure









3.


The case started with an application for immunity under the Leniency Notice (3) by Deutsche Bank.












4.


On 18 March 2019, the Commission initiated proceedings pursuant to Article 11(6) of Regulation No 1/2003 (4) and Article 2(1) of Commission Regulation No 773/2004 (5) against both Deutsche Bank and Rabobank. On the same day Deutsche Bank was granted conditional immunity pursuant to point 8(a) of the Leniency Notice.












5.


The case was initially pursued under the Settlement Notice (6).












6.


In December 2020, the Commission held settlement meetings with Deutsche Bank and Rabobank respectively, following which both Parties obtained access to the evidence used to determine the envisaged objections, in accordance with Article 10a(2) of Regulation No 773/2004.












7.


Further to these meetings, it became apparent that it was unlikely that a common understanding regarding the scope of the potential objections could be reached. On 20 April 2021, the Commission informed the Parties that the case would continue within the framework of the ordinary procedure.




3.   Written Procedure and oral hearing









8.


The Commission adopted a Statement of Objections (‘SO’) on 6 December 2022, notifying it to the Parties on 7 December 2022. In the SO, the Commission preliminarily concluded that the infringement consisted of agreements and/or concerted practices that had the object of restricting and/or distorting competition in the secondary market for the trading of (i) Euro-denominated Sovereign bonds, (ii) Euro-denominated Supra-Sovereign (Supra-national) bonds, Euro-denominated Foreign Sovereign bonds, Euro-denominated Sub-Sovereign/Agency bonds; (iii) Euro-denominated Covered bonds and (iv) Euro-denominated Government Guaranteed bonds.












9.


The Parties received access to file between 14 December and 22 December 2022 (7). I did not receive any complaints or requests related to access to file.












10.


The Directorate-General for Competition (‘DG Competition’) granted the Parties eight weeks plus seven working days from the working day following access to the file to submit their written reply to the SO. There was no request for an extension.












11.


On 21 February 2023, Rabobank submitted its reply to the SO (the ‘SO Reply’), in which it requested an oral hearing.












12.


On the same day, Deutsche Bank informed DG Competition in writing that it did not intend to reply to the SO in substance. However, it expressed its intention to request the opportunity to participate in an oral hearing, should one be requested by Rabobank and take place.












13.


The oral hearing took place on 19 April 2023. Both Deutsche Bank and Rabobank participated. The hearing proceeded smoothly and absent any procedural requests or complaints.




4.   Procedural Arguments









14.


Rabobank raises one procedural argument in its SO Reply, to which it also referred during the oral hearing. It argues that the Commission did not conduct a diligent, impartial, and careful examination, but instead (i) placed ‘an overly heavy and uncritical reliance’ on the leniency statements and information provided by Deutsche Bank; (8) and (ii) ‘failed to adduce any other evidence to corroborate the statements made by the leniency applicant’ (9).












15.


In administrative proceedings, the principle of good administration, laid down in Article 41 of the Charter of Fundamental Rights of the European Union (10), requires the competent institution to examine carefully and impartially all the relevant aspects of the individual case (11). The failure to investigate alleged breaches of Article 101 TFEU impartially, and properly justify the findings, may constitute a breach of Article 41 of the Charter and thus amount to a procedural error (12).












16.


At the same time, it is established case law that the Commission can base its finding of an undertaking’s infringement on statements made by other incriminated undertakings (13). Statements made pursuant to the Leniency Notice cannot therefore be regarded as devoid of probative value on that ground alone (14).The Commission has discretion as to whether it is appropriate to adopt further investigative measures. It is therefore for the undertakings to prove that the Commission’s conclusions could only be explained by it being biased and not by the legitimate exercise of its discretion in conducting the investigation (15).












17.


Rabobank does not make specific allegations concerning indications of bias on the side of the Commission. Even though Rabobank claims that the SO ‘uncritically relie[d] on the leniency evidence’ (16), it also acknowledges that the Commission examined other relevant evidence, specifically the trader communications (17). Indeed, the draft decision sets out the trader communications relied upon in detail, in its section 5.2. They were also detailed in section 5.2 of the SO. Therefore, it is plain that the Commission conducted its own analysis of the available evidence to reach its conclusions. The interpretation of the trader communications relied upon is a matter of substance and Rabobank had the opportunity, in its reply to the SO and at the oral hearing, to contest the Commission’s preliminary findings. In any case, the mere fact that the Commission disputes or rejects an undertaking’s arguments is not in itself proof of a biased assessment (18).












18.


Therefore, I do not find Rabobank’s argument that the Commission has breached its obligations of impartiality and sound administration convincing.




5.   Draft Decision and Conclusion









19.


The draft decision concludes that the infringement consisted of agreements and/or concerted practices that had the object of restricting and/or distorting competition in the secondary market for the trading of (i) Euro-denominated Supra-Sovereign (Supra-national) bonds, Euro-denominated Foreign Sovereign bonds and Euro-denominated Sub-Sovereign/Agency bonds, and (ii) Euro-denominated Government Guaranteed bonds. In relation to Euro-denominated Sovereign bonds and Euro-denominated Covered bonds, the objections are not upheld in the draft decision.












20.


Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which the Parties have been afforded the opportunity of making known their views. I conclude that it does so.












21.


In view of the above, I consider that the effective exercise of the procedural rights of the Parties in this case has been respected.






Brussels, 20 November 2023.

Dorothe DALHEIMER
               





(1)  Pursuant to Article 16 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)  For the purposes of the decision, references to the EEA should be understood as covering the 27 Member States of the European Union and the United Kingdom, as well as Iceland, Liechtenstein and Norway.

(3)  Commission Notice on immunity from fines and reduction of fines in cartel cases (OJ C 298, 8.12.2006, p. 17) (‘Leniency Notice’).

(4)  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 No 1/2003’).

(5)  Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18) (‘Regulation No 773/2004’).

(6)  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) (‘Settlement Notice’).

(7)  Access to file was granted to Rabobank on 14 December 2022 by DVD and between 15 December and 22 December 2022 at the Commission premises. Access to file was granted to Deutsche Bank on 16 December 2022 by DVD.

(8)  […]

(9)  […]

(10)  
            OJ C 326, 26.10.2012, p. 391


(11)  Judgments of 2 February 2022, Scania and Others v Commission, T-799/17, ECLI:EU:T:2022:48, paragraph 146 (‘
            Scania
            ’); of 24 September 2019, HSBC Holdings and Others v Commission, T-105/17, ECLI:EU:T:2019:675, paragraphs 285-286; of 10 November 2017, Icap and Others v Commission, T-180/15, ECLI:EU:T:2017:795, paragraph 271 (‘
            Icap
            ’); and of 27 September 2012, Shell Petroleum and Others v Commission, T-343/06, ECLI:EU:T:2012:478, paragraph 170.

(12)  
            Icap, paragraph 276.

(13)  See, for example, judgments of 29 September 2021, Nippon Chemi-Con Corporation v Commission, T-363/18, ECLI:EU:T:2021:638, paragraph 158 (‘
            Nippon Chemi-Con
            ’); of 7 November 2019, Campine and Campine Recycling v Commission, T-240/17, ECLI:EU:T:2019:778, paragraph 117; of 12 July 2019, Sony Optiarc and Sony Optiarc America v Commission, T-763/15, ECLI:EU:T:2019:517, paragraph 47; of 8 September 2016, Goldfish and Others v Commission, T-54/14, ECLI:EU:T:2016:455, paragraph 96 and the case law cited; and of 29 February 2016, Schenker v Commission, T-265/12, ECLI:EU:T:2016:111, paragraph 41.

(14)  
            Nippon Chemi-Con, paragraph 158 and the case law cited.

(15)  
            Scania, paragraph 154. This echoes the general rule in EU law that a party alleging a fact normally bears the burden of proving it: see, in this sense, judgment of 30 March 2022, Latam Airlines Group and Lan Cargo v Commission, T-344/17, ECLI:EU:T:2022:185, paragraph 166 and case law cited; and order of 23 September 2020, Deutsche Telekom v Commission, T-64/20, ECLI:EU:T:2020:481, paragraph 23 and case law cited.

(16)  […]

(17)  […]

(18)  Judgment of 16 May 2018, Lufthansa v Commission, T-712/16, ECLI:EU:T:2018:269, paragraph 145.


ELI: http://data.europa.eu/eli/C/2024/4630/oj
ISSN 1977-091X (electronic edition)