Antitrust

S H E A R M A N & S T E R L I N G L L P | 5 7 staggered procedure, prior to the General Court's Pometon judgment it was believed that the EC may abandon its practice of running staggered hybrid proceedings as a result of the General Court's criticisms of the procedure. In ICAP, the General Court found that staggered procedures may be problematic since the EC's belief that ICAP had facilitated the YIRD cartel's collusion "could easily be inferred" from the earlier settlement decision. 9 The Court also held that any such inferences of liability cannot be remedied by the EC merely disclaiming that its settlement decision does not make any legal findings against the non-settling parties. Given the series of events that can make up a cartel's infringement and the interdependence of cartelists' actions and of their common objectives, settlement decisions usually describe the participation of all of the cartelists and not just those of the settling parties. This leads to the question as to whether it is possible for the EC to set out the facts of a settlement decision without alluding to the involvement of cartelists that have dropped out of settlement negotiations. In Pometon, the General Court may go some way towards answering this question by permitting the references to Pometon's involvement in the cartel in the EC's settlement decision as they were necessary to provide the complete factual description of the cartel and as the EC did not legally qualify Pometon's conduct or indicate that Pometon had already infringed Article 101 of the TFEU. After reviewing each of the references to Pometon in the EC's settlement decision, the Court did not find that any of them infringed the presumption of Pometon's innocence. According to the Court, the fact that the settling parties had admitted their participation in the cartel did not A PA R T Y D R O P P I N G O U T F R O M T H E S E T T L E M E N T P R O C E D U R E D O E S N O T R E Q U I R E T H E E C T O D E L A Y T H E A D O P T I O N O F I T S S E T T L E M E N T D E C I S I O N A G A I N S T T H E R E M A I N I N G S E T T L I N G PA R T I E S 1. At the time of writing, there have been seven hybrid cartel cases investigated by the EC (most recently in Case AT.40135 Forex — see n. 4) out of a total of thirty one settlement cases. 2. See e.g. Joaquin Almunia speech, "Fighting against cartels: A priority for the present and for the future," SV Kartellrecht, April 3, 2014. 3. Case T 180/15: ICAP Plc and Others v. European Commission (Case C-39/18 P) (ICAP); and Case T-433/16: Pometon SpA v. European Commission (Pometon). 4. European Commission Decisions of May 16, 2019, in Case AT.40135 Forex. At the time of writing, these were the most recent settlement decisions adopted by the EC. 5. See the European Commission Decisions of December 4, 2013 and February 2, 2015, in Case AT.39861 — Yen Interest Rate Derivatives. 6. ICAP, paras. 258–260. 7. Case C-39/18 P. Appeal brought on January 22, 2018, by the European Commission against the judgment of the General Court (Second Chamber, Extended Composition) delivered on November 10, 2017, in Case T 180/15: ICAP Plc and Others v. European Commission. 8. The EC adopted its settlement decision against the four settling parties, Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Wϋrth, on April 2, 2014 and its prohibition decision against Pometon on May 25, 2016 — see Case AT.39792 — Steel Abrasives. 9. ICAP, para. 260. 10. Pometon, para. 68. 11. Pometon, paras. 99–100. 12. ICAP, para. 266. Pometon, paras. 70–71 and 101. 13. ICAP, para. 268. CONTINUED > transform the references to Pometon into a "disguised verdict" of Pometon's guilt by the EC. 10 The Court therefore dismissed Pometon's ground of appeal that the EC had infringed its procedural rights of defense as unfounded. As a consequence, the General Court's findings in Pometon are likely to encourage the EC to continue conducting staggered hybrid procedures. Indeed, the Court specifically proclaimed that a party dropping out from the settlement procedure does not require the EC to delay the adoption of its settlement decision against the remaining settling parties. 11 DO PARALLEL HYBRID CASES HAVE A FUTURE IN EC ENFORCEMENT? The General Court emphasized the importance of the procedural safeguards of the presumption of innocence and the right to a fair trial in both ICAP and Pometon, and in the former judgment, it stated that these considerations supersede the procedural efficiencies gained from settlement cases. 12 In cases where the EC considers that it will be difficult to establish the liability of settling parties without also taking a view on the participation of non-settling parties, the General Court advised that the EC should run hybrid cases in parallel in order to respect the essential procedural safeguards of the undertakings involved. 13 Given the potential difficulties of ensuring the protection of parties' rights of defense in staggered proceedings and that they are prone to legal challenges, it is possible, despite the Pometon judgment, that in some future cases the EC will prefer the more cautious approach of parallel cases.

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