On 22 November, the European Commission (“Commission”) fined Dutch Rabobank €26.6 million for participating in a cartel concerning the trading of certain Euro-denominated SSA bonds (Supra-Sovereign bonds, Foreign Sovereign bonds and Sub-Sovereign/Agency bonds) and Government Guaranteed bonds in the European Economic Area (“EEA”), together with Deutsche Bank. Despite its participation, Deutsche Bank avoided a €156 million fine because it revealed the cartel to the Commission, receiving full immunity under the leniency programme. 

To give some background, in December 2022, the Commission announced that a statement of objections had been sent to Rabobank and Deutsche Bank for their participation in this alleged cartel. The Commission’s investigation allegedly revealed that between 2006 and 2016, the two banks, through some of their traders, exchanged commercially sensitive information and coordinated trading and pricing strategies, breaching Article 101 of the TFEU. According to the Commission, certain traders employed at the companies’ London and Frankfurt offices used online chatrooms, emails and messages to exchange commercially sensitive information concerning (i) prices, volumes and trading strategies; (ii) the identities of counterparties; and (iii) what the traders looked for when purchasing or selling bonds. Traders would then adjust price levels and trading strategies based on these exchanges. 

In response to the Commission’s decision, Rabobank issued a statement expressing its “disappointment” with the outcome since the bank “had cooperated with the Commission’s investigation throughout”. The bank also suggested that it may appeal the fine. This represents the third recent Commission fine regarding cartels affecting European bond markets. In April 2021, Bank of America Merrill Lynch, Credit Agricole and Credit Suisse were fined €28.49 million for breaching EU antitrust rules through their participation in the secondary trading market for EEA SSA bonds denominated in US dollars. In May 2021, the Commission also fined Nomura, UBS and UniCredit a total of €371 million for colluding in the market of European government bonds.

The opening of these investigations shows the thorough scrutiny that the banking sector is under from the EU competition authorities. This raises potential concerns about the use of chatrooms to share commercially sensitive information not only in that sector, but also more widely. Apparently in the banking sector, partial banning and use limitations are considered. 

The Commission has made it clear that it will “remain vigilant and committed to preserv[ing] effective competition in financial markets”, according to Competition Commissioner Didier Reynders. “Trustworthy and well-functioning bonds trading markets are crucial not only for the national authorities issuing bonds but also for the investors buying and trading them”, he added. 

The case also demonstrates that despite all the attention and focus on tech markets in antitrust, the Commission’s cartel enforcement is alive and “business as usual”. 

If you need more information or further guidance in this area, please contact Hein Hobbelen or Álvaro López de Ochoa García. 

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