Antitrust

5 6 Settlement negotiations, particularly if certain parties are at risk of dropping out, entail complex and strategic decision- making by the parties. The EC's future procedural practice in its hybrid cases, i.e., whether it decides to run the settlement and non-settlement proceedings in parallel or by way of the adopting the settlement decision followed by the standard ordinary infringement decision, will have a significant influence on parties' settlement strategies in the future. The General Court's judgments in ICAP and Pometon have provided diverging assessments as to the legality of the EC's historical preference to run hybrid cases in a staggered procedure. 3 The EC's apparent practice in its first hybrid case since these judgments, Forex, 4 suggests that the EC has been comforted by the more recent Pometon judgment in order to continue running hybrid cases in a staggered format in the future. THE GENERAL COURT'S JUDGMENTS IN ICAP AND POMETON ICAP, an interdealer broker, withdrew from settlement negotiations with the EC in relation to the Yen Interest Rate Derivatives (YIRD) cartel case in November 2013. In December 2013, the EC settled with all of the other banks and another broker involved in the same case. The EC reverted to standard infringement proceedings, sent a Statement of Objections to ICAP and then eventually fined ICAP in February 2015 for facilitating the cartels that had been established in the 2013 settlement decision. 5 In ICAP's application for annulment against the EC's standard infringement decision, the General Court held that the EC had breached ICAP's rights of defense and, in particular, the presumption of innocence, by describing ICAP's role as a facilitator in the 2013 settlement decision 6 which was not addressed to ICAP. The EC had, in effect, prejudged the outcome of its investigation against ICAP prior to even formally starting its proceedings against it and ICAP had not been granted an opportunity to defend itself against the EC's allegations in the 2013 settlement decision. Nevertheless, the Court ruled that this did not vitiate the legality of the EC's infringement decision against ICAP as its substance would have been the same absent this breach of ICAP's rights of defense. The EC has appealed the General Court's judgment but only in respect of the General Court's annulment of the EC's fines imposed on ICAP on the grounds of insufficient reasoning for the EC's fining methodology. 7 In Pometon, the General Court was again considering an appeal from the only non- settling party, Pometon, in relation to the EC's hybrid case against a steel abrasives cartel. 8 In contrast to ICAP, the Court rejected Pometon's allegations that the EC had infringed Pometon's rights of defense by referring to Pometon's involvement in the cartel in the settlement decision prior to Pometon being granted the formal opportunity to defend itself as part of the EC's standard infringement proceedings. JUDICIAL DEBATE OVER THE STAGGERED HYBRID PROCEDURE In five out of six of its hybrid cases to date, the EC has concluded its settlement negotiations as quickly as possible and it has then, usually several months later, sent statements of objections to the non-settling party as part of its ordinary infringement proceedings. Even if in ICAP the General Court's partial annulment of the EC decision was not due to a breach of the rights of defense from the CARTELS 10 T H E E C H A D , I N E F F E C T, P R E J U D G E D T H E O U T C O M E O F I T S I N V E S T I G A T I O N A G A I N S T I C A P Recent Developments in Hybrid Settlement Cases

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