Antitrust

S H E A R M A N & S T E R L I N G L L P | 5 9 out of settlement negotiations, the EC's settlement efforts will have been wasted as it will have to wait for the full standard proceedings to conclude prior to adopting the settlement decision. This may diminish the initial attractiveness of entering into settlement negotiations for both the EC and for undertakings, which may lead to fewer settlement cases overall in the future. In addition, under a pure settlement or parallel hybrid dilemma, parties threatening to withdraw from settlement may have a stronger bargaining position. This is the opposite of the original aim of hybrid cases to allow the EC to "use the settlement procedure without being held hostage" to holdouts. 16 On the other hand if, as appears more likely following Pometon, the EC continues with its staggered hybrid approach, this may pose difficulties for addressees to the EC's cartel decisions whilst potentially assisting claimants pursuing follow-on damages litigation against the cartelists. Splitting a factually and legally interwoven cartel into staggered EC decisions in accordance with the addressees' procedural preferences represents an inherent risk to the non-settling parties' rights of defense. By allowing the EC to publish an earlier settlement decision that includes references to the non-settling parties, the burden of proof is, in effect, shifted onto the non-settling parties to prove that the references to it in the settlement decision are unjustified. The subsequent standard proceedings then start on the basis of the facts of the earlier settlement decision and so a non-settling party may find it very difficult in practice to defend itself properly or to reverse or restrict the EC's publicized starting position. An early settlement decision also potentially opens up the non-settling party to damages claims that rely on the information provided in the early settlement decision. U N D E R A P U R E S E T T L E M E N T O R PA R A L L E L H Y B R I D D I L E M M A , PA R T I E S T H R E A T E N I N G T O W I T H D R A W F R O M S E T T L E M E N T M A Y H A V E A S T R O N G E R B A R G A I N I N G P O S I T I O N 14. European Commission Decision of July 20, 2010 in Case COMP/38.866 — Animal Feed Phosphates. 15. See EC Press Release "Commission fines Barclays, RBS, Citigroup, JPMorgan and MUFG €1.07 billion for participating in foreign exchange spot trading cartel," May 16, 2019, available here: http://europa. eu/rapid/press-release_IP-19-2568_en.htm. 16. Joaquin Almunia speech, "Fighting against cartels: A priority for the present and for the future", SV Kartellrecht, April 3, 2014. 17. Pometon, paras. 72, 77-79 and 100. 18. See pending Cases: T-105/17 HSBC Holdings and Others v. Commission, T-106/17 JPMorgan Chase and Others v. Commission and T-113/17 Credit Agricole and Crédit Agricole Corporate and Investment Bank v. Commission (all appealing Case AT.39914 Euro Interest Rate Derivatives, decision of December 7, 2016); and T-799/17 Scania and Others v. Commission (appealing Case AT.39824 Trucks, decision of September 27, 2017). CONCLUSION The General Court in ICAP held that the earlier settlement decision had breached ICAP's presumption of innocence but it stopped short of annulling the later standard infringement decision against ICAP on this ground. Whereas in its later judgment in Pometon, the Court concluded that the earlier settlement decision did not breach Pometon's rights of defense as there was no indication that the EC had already concluded that Pometon had infringed Article 101 of the TFEU — the Court confirmed that the EC may refer to the non- settling party in the settlement decision and that the EC is not precluded by EU law to run staggered hybrid procedures. 17 The EC's apparent adoption of a type of staggered procedure in Forex — its first hybrid case since the Pometon judgment — suggests that the EC relies on Pometon in order feel able to continue with its more historically frequent trend of running hybrid cases in staggered processes. Nonetheless, the General Court's ICAP and Pometon judgments illustrate that earlier settlement decisions in staggered procedures will require careful handling in order to uphold the settling parties' rights of defense. It is not inconceivable that standard infringement decisions adopted later in staggered procedures will be subject to further judicial appeals in the future. The General Court will provide further guidance on the legality of staggered hybrid procedures in the upcoming appeals of non-settling parties in the staggered hybrid cases in Euribor and Trucks. 18

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