Made in accordance with Article 3(6) of the Statute of the European Ombudsman[1]

The background to the complaint

1. The complainant, Crédit Agricole SA and Crédit Agricole Corporate and Investment Bank, is a financial institution based in France.

2. In October 2011, the Commission carried out unannounced inspections at the complainant's premises and the premises of several other companies active in the sector of financial derivative products linked to the Euro Interbank Offered Rate[2]. The Commission had concerns that the companies in question may have violated EU antitrust rules that prohibit cartels and restrictive business practices.

3. In March 2013, the Commission informed the complainant that it had decided to open a formal investigation concerning the alleged infringement of Article 101 TFEU by the complainant, together with a number of its competitors, in relation to interest rate derivatives denominated in Euro ('EIRD'). The complainant initially participated in settlement discussions[3], but formally abandoned the settlement procedure in October 2013, as it refused to accept responsibility for the alleged cartel.

4. In December 2013, the Commission adopted decisions against four companies that had decided to settle the case by acknowledging their participation in the EIRD cartel. The fines imposed for this infringement totalled more than EUR 1 billion. The Commission's investigation into the EIRD cartel continued under the standard procedure in relation to the complainant and two other financial institutions that had not agreed to settle the case.

5. On 25 April 2014, the complainant wrote to the Commission raising objections concerning its objectivity and impartiality. In particular, it referred to a number of statements made by the then Commissioner responsible for competition (the 'Commissioner') and which, in its view, could cast doubts on the impartiality of the investigation. It also argued that the Commissioner had instructed his services to accelerate the procedure with a view to adopting a decision before the end of his mandate. On 19 May 2014, the Commission replied rejecting the complainant's objections.

6. On 21 May 2014, the complainant received the Statement of Objections[4] for its alleged participation in the EIRD cartel.

7. On 2 June and 7 July 2014, the complainant lodged the present complaint.

The inquiry

8. The Ombudsman opened an inquiry into the complaint and identified the following allegation and claim:

Allegation:

The Commission breached its obligation of impartiality in its investigation into the alleged infringement of the EU competition rules.

Claim:

The Commission should respect its obligation of impartiality in its investigation into the alleged infringement of the EU competition rules.

9. In the course of the inquiry, the Ombudsman received the opinion of the Commission on the complaint and, subsequently, the comments of the complainant in response to the Commission's opinion. The Ombudsman's draft recommendation takes into account the arguments and opinions put forward by the parties.

Alleged breach of the obligation of impartiality and related claim

Arguments presented to the Ombudsman

10. The complainant mainly argued that a number of public statements made by the Commissioner would seem to imply that the Commission, before it concluded (or even formally opened) its inquiry into the alleged cartel, had already made up its mind about its existence and the liability of those involved in it, including, in particular, the complainant. It referred to the following statements:

"The evidence we have collected is quite telling, so I'm pretty sure this investigation will not be closed without results" (MLex, 24 July 2012).

"The gravity of the infringement was "above the average", which would draw the amount of the sanction upwards (European Parliament, 24 September 2012).

"Il y a encore trois institutions bancaires et un broker qui continuent à être investigués parce qu'ils n'ont pas voulu participer à l'accord final: une institution française Crédit Agricole [...] dont l'investigation continue, et on ira jusqu'à la fin, et je dois dire comme on a beaucoup d'informations [rires] déjà, l'investigation n'est pas la plus difficile du monde, à partir de ce moment-là on finira cette investigation" (French Senate, 28 January 2014).

"Parfois il y a besoin d'utiliser les instruments traditionnels de la politique de concurrence, et Libor/Euribor, c'est le cas. Parce qu'il y a un cartel. Un cartel organisé autour de la manipulation d'un benchmark" (Public intervention, 21 February 2014).

"We have three banks and a broker being investigated on the Libor/Euribor case because they didn't want to settle and we are preparing the statement of objections and the next step will follow" (European Parliament, 18 March 2014).

"We will adopt a statement of objections more or less in the coming couple of months" (MLex, 28 March 2014).

"Settling companies must come clean and pay for their mistakes. (...) Although I expect hybrid cases to remain the exception, they allow us to use the settlement procedure without being held hostage to the strategies of the companies that prefer not to settle." (Speech, Brussels, 3 April 2014).

"Probably before the end of the mandate of this Commission there will be some news from this investigation" (Public declaration, 30 June 2014).

11. The complainant also argued that, according to press articles based on sources from within the Commission, the Commissioner had instructed his services to accelerate the procedure with a view to adopting a decision before the end of his mandate, that is before October 2014. In the complainant's view, this might explain why the Commission granted the complainant only four weeks to reply to the Statement of Objections, despite the complexity of the file and the nature of the objections raised—which could harm the complainant's rights of defence.

12. The Commission argued that according to the case-law, the complainant must "demonstrate that if the official concerned was biased against the applicant, that bias was reflected in the actual decision."[5] However, no decision has been taken yet regarding the complainant. Second, the Commission noted that a number of safeguards guarantee the fairness of the proceedings. Third, the Commission noted that its decisions are collegial since they are adopted by the college of Commissioners. Consequently, the public statements made by a Commissioner cannot impact upon the impartiality of the final decision.

13. In relation to the specific statements, the Commission argued that these statements served the purposes of transparency and of informing the public about a matter of great public interest. It did not agree with the complainant's assertion that these statements could be interpreted to mean that the Commission had already decided on the matter. It went on to comment on each statement put forward by the complainant[6].

14. Regarding the second argument put forward by the complainant, the Commission noted that it had never denied that cartel investigations are a priority and that it has an obligation to proceed rapidly in carrying out such investigations. That being said, it stated that while respecting its obligation to proceed rapidly, it did not breach the complainant's rights of defence. In this respect, it noted that, after successive extensions of the relevant deadline, the complainant was given almost six months to reply to the Statement of Objections. It further noted that, as the hearing of the parties had not yet taken place at the time when it sent its opinion (October 2014), no decision could have been taken before the end of the mandate of the former Commissioner.

15. The complainant noted that, given the public interest in the investigation, the Commissioner should have been particularly cautious when making statements, since it was expected that his comments would be widely disseminated. The complainant also argued that the statements should also be examined as a whole, because their sequence demonstrates the Commission's bias. The complainant further noted that the Commission did not deny the existence of internal instructions; it merely tried to justify them. In the complainant's view, even if a decision was not adopted before the end of the mandate, the mere existence of these instructions is sufficient to establish a breach of the principle of impartiality. It also argued that, in complying with its duty to take decisions within a reasonable time, the Commission cannot disregard the complainant's rights of defence. In this regard, the complainant pointed out that the initial deadline of four weeks given to it to reply to the Statement of Objections was extended after it had made several requests to the Hearing Officer and not because the Commission took into account the complexity of the case and the size of the case-file.

The Ombudsman's assessment leading to a draft recommendation

16. At the outset, the Ombudsman notes that, in their submissions, both the Commission and the complainant raised a number of arguments relating to the settlement procedure, the overall fairness of the procedure, respect of rights of defence, including the right of access to the file. In this respect, she notes that her inquiry is focused on a specific question, namely whether there was a breach of the Commission's duty of impartiality because of (i) the public statements made by the former Commissioner and/or (ii) the instructions to accelerate the procedure. Her assessment therefore will deal only with this question, and will not include any other issues which have been mentioned by the parties and which are not part of the present inquiry, given that the competition proceedings are still ongoing.

Public statements made by the then Commissioner

17. The complainant referred to a number of public statements made by the then Commissioner and which, in its view, demonstrate that he had already reached a conclusion regarding its participation in the EIRD cartel before the investigation was completed. The Commission firstly argued that it is impossible to establish a breach of impartiality without an actual decision. In this regard, it referred to the relevant case-law. The Ombudsman notes, however, that this case-law concerns actions for annulment. In such cases, when someone wishes to challenge the legality of a decision on the basis of a breach of impartiality, a decision is obviously a prerequisite. This is not, however, the case regarding this inquiry, where what is put into question is not the legality of a decision, but the Commission's—that is to say, former Commissioner's—behaviour.

18. In this respect, the Ombudsman makes a distinction between a decision that can be found to be partial and behaviour that can be perceived as partial. In the first case, a breach of the principle of impartiality has an impact on the legality of the decision and can lead to its annulment. In the second, the validity of the final decision is not necessarily put into question. The Ombudsman points out that the principles of good administration require EU institutions not only to take impartial and objective decisions, but also to be perceived to be impartial throughout the procedure leading to the adoption of a decision. EU institutions and their staff must therefore avoid any action that could lead to their impartiality being reasonably called into question. Doubts may arise, for instance, if an institution creates the impression that it has already reached a conclusion regarding a case under investigation before the procedure has been completed. In such a situation, the parties under investigation may have the feeling that they will not have the benefit of fair proceedings and that there is nothing they can do to defend their case and reverse the upcoming decision. The Ombudsman will therefore examine whether the public statements made by the former Commissioner in this case could reasonably be perceived as suggesting that the Commission or the Commissioner had already made up its or his mind as regards the alleged infringement of EU competition rules. For this, it is of no importance that the Commission has not yet adopted a final decision regarding the complainant's participation in the EIRD cartel. In the same line of argument, the Ombudsman cannot agree with the Commission's argument relating to the collegial nature of its decisions, since, as she has already explained, the present case does not concern the impartiality of the Commission as regards a decision adopted by it, but how the behaviour of the Commissioner responsible for competition, whose role in all cartel investigations is pivotal, could have been perceived.

19. In examining the statements identified by the complainant, the Ombudsman distinguishes between those made before and those made after the formal investigation was launched.

(i) Statements made before the opening of a formal investigation.

20. In 24 July and 24 September 2012[7], the Commissioner referred to the evidence collected during the inspections and their evidentiary value, and made comments about the gravity of the infringement and the high fine that could be imposed. Reading these comments gives the impression that it was almost established that a cartel existed and that the Commission was ready to impose fines. However, in 2012, the investigation was at a very early stage; the Commission was still gathering evidence and it had not yet taken a decision to initiate formal proceedings. Particular caution was therefore required regarding comments and public statements at that stage.

21. In its opinion, the Commission tried to mitigate the tone of the second statement. It argued that what the Commissioner meant was that, in light of the products potentially concerned, if an infringement was established, the fine would be expected to be high. However, the Commissioner's actual statement contained no hypothesis. It was an assertion, as the statement did not refer to the "alleged infringement", but to "the infringement". Had the original statement contained the amendments that the Commission included in its opinion, it could have been considered as a fairly neutral statement. However, that was not the case as regards the statement that was made.

22. The Commission also argued that the complainant was not referred to by name, and that it was not individually concerned by these comments, since many companies were under investigation at that time. The Ombudsman is not convinced by this argument. Even if the complainant's name was not specifically mentioned, the statements in question referred to a small group of companies which were easily identifiable. By reading or listening to these statements, interested third parties could reasonably get the impression that the complainant's case had already been decided.

(ii) Statements made after the opening of a formal investigation.

23. The Ombudsman points out that some of the statements made, after the four other companies had acknowledged involvement in a cartel and had settled their cases, and after the formal proceedings vis-à-vis the complainant had been initiated, merely announce the next step of the procedure or upcoming developments[8]. In the Ombudsman’s view, these statements are, as the Commission rightly pointed out, factual statements rather than value judgements and cannot be considered as breaching the principle of impartiality. The same is true for statements which appear to concern the settling companies only or refer in general to the existence of the cartel without referring to the complainant or the other companies under investigation[9], because at that time, the Commission had already established that a cartel existed in relation to the settling companies and had imposed fines on them.

24. That being said, the situation is different in relation to the statement made in the context of a speech to the French Senate. On that occasion, the former Commissioner expressed himself as follows: "Il y a encore trois institutions bancaires et un broker qui continuent à être investigués parce qu'ils n'ont pas voulu participer à l'accord final: une institution française Crédit Agricole [...] dont l'investigation continue, et on ira jusqu'à la fin, et je dois dire comme on a beaucoup d'informations [rires] déjà, l'investigation n'est pas la plus difficile du monde, à partir de ce moment-là on finira cette investigation". In the Ombudsman’s view, the above statement leaves little room for doubting that the former Commissioner considered that it was clear that the complainant had participated in the cartel. It can reasonably be inferred from the statement that, according to the former Commissioner, the evidence that the Commission had collected against the complainant was so strong that it was only a matter of time before a final decision confirming the infringement would be taken. The Commission failed to put forward any convincing argument to justify this statement. It merely noted that the fact that an investigation concerning the complainant was ongoing was known to the public. However, this statement goes beyond what could be justified by the purpose of providing information on an ongoing investigation and creates the impression that the Commissioner had already made up his mind about the complainant's alleged participation in the cartel.  

25. Lastly, regarding the statement made in April 2014 in relation to the settlement procedure[10], the Commission clarified that it concerned a different cartel case, unrelated to the EIRD case[11]. The Ombudsman notes that the statement was indeed made in another context. There is therefore no reason to deal with it in the present case.

Instructions to issue a decision before the end of mandate of the former Commission

27. The complainant also argued that there was a breach of the principle of impartiality because the Commissioner had instructed his services to accelerate the procedure with a view to adopting a decision before the end of his mandate. In this respect, it referred to press articles based on sources from within the Commission. First, the Ombudsman notes that the Commission did not challenge the complainant's argument that the then Commissioner had asked his staff to accelerate the procedure.

28. The Ombudsman notes, nevertheless, that the mere existence of such instructions is not sufficient to prove the existence or to create a perception of bias. Nor can the objective of dealing with cases swiftly, as such, be considered a breach of the principle of impartiality. Furthermore, the Commission clearly has discretion in setting priorities in handling its investigations into alleged infringements of competition rules. The Ombudsman also considers it justified that the former Commissioner endeavoured to close pending cases before his successor took office.

29. In support of its argument that the Commission had acted improperly, the complainant argued that the Commission had unduly rushed matters by having granted it a very short period of time to reply to the Statement of Objections, namely only four weeks. In its view, the duty to take decisions within a reasonable time should not be detrimental to the rights of defence. The Ombudsman shares the complainant’s view, but, as she has already noted, it is not within the scope of this inquiry to assess whether the complainant’s rights of defence have been respected. The only point relevant for this inquiry is whether the Commission could have been perceived as partial because of its efforts to accelerate the procedure.

30. It is true that the Commission had initially granted the complainant only four weeks to reply to the Statement of Objections, despite the complexity of the file. That could have cast some doubts on its impartiality. However, regardless of whether the extensions were given at the complainant’s request or on the Commission’s initiative, the deadline was extended several times and, as a result, the complainant had six months to prepare its defence and submit its observations. Furthermore, the Ombudsman cannot ignore the fact that the case is still ongoing and that a new Commissioner now has responsibility for the matter.

31. In light of the above, the Ombudsman finds no grounds to pursue further this part of the complaint.

Conclusions

32. It is clear from the foregoing that, because of a number of statements made by the Commissioner formerly responsible for competition, the Commission was perceived to have already reached a conclusion regarding the complainant’s participation in the EIRD cartel before the investigation was complete. This was an instance of maladministration. However, in view of the fact that proceedings are still pending, that the former Commissioner has left office and that the new Commissioner for Competition is now in charge of the case, the Ombudsman considers it likely that the instance of maladministration that occurred in this case will not affect the further handling of the complainant's case by the Commission. There is, however, the need to avoid similar situations in the future. With a view to assisting the Commission in reaching this goal, the Ombudsman makes the following draft recommendation below, in accordance with Article 3(6) of the Statute of the European Ombudsman.

The draft recommendation

On the basis of the inquiry into this complaint, the Ombudsman makes the following draft recommendation to the Commission:

The Commission should acknowledge the maladministration that has occurred in this case, apologise for it and take steps to avoid similar problems in the future. In order to do so, the Commission should consider issuing guidelines on public statements by Commissioners about ongoing investigations.

The Commission and the complainant will be informed of this draft recommendation. In accordance with Article 3(6) of the Statute of the European Ombudsman, the Commission shall send a detailed opinion by 30 June 2015. The detailed opinion could consist of the acceptance of the draft recommendation and a description of how it has been implemented.

Strasbourg, 09/03/2015

 

Emily O'Reilly

European Ombudsman

 

[1] Decision of the European Parliament of 9 March 1994 on the regulations and general conditions governing the performance of the Ombudsman's duties (94/262/ECSC, EC, Euratom), OJ 1994 L 113, p. 15.

[2] Derivatives are contracts traded on financial markets that are used to transfer risk. Interest rate derivatives (e.g. forward rate agreements, swaps, futures, options) are financial products which are used by banks or companies for managing the risk of interest rate fluctuations. These products are traded worldwide and play a key role in the global economy. They derive their value from the level of a benchmark interest rate, such as the London interbank offered rate (LIBOR) – which is used for various currencies including the Japanese yen (JPY) - or the Euro Interbank Offered Rate (EURIBOR), for the euro. These benchmarks reflect an average of the quotes submitted daily by a number of banks who are members of a panel (panel banks). They are meant to reflect the cost of interbank lending in a given currency and serve as a basis for various financial derivatives. Investment banks compete with each other in the trading of these derivatives. The levels of these benchmark rates may affect either the cash flows that a bank receives from a counterparty, or the cash flow it needs to pay to the counterparty under interest rate derivatives contracts.

[3] Under the EU competition rules, the settlement procedure is a simplified procedure in which a company acknowledges its participation in a cartel and receives a 10% reduction in the fine.

[4] A Statement of Objections is a formal step in Commission investigations into suspected violations of EU rules on restrictive business practices. The Commission informs the parties concerned in writing of the objections raised against them and the companies can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company's annual worldwide turnover.

[5] Case T-31/99 ABB v Commission [2002] ECR II-1881, paragraph 105.

[6] The arguments regarding each statement will be presented together with the Ombudsman's assessment.

[7] "The evidence we have collected is quite telling, so I'm pretty sure this investigation will not be closed without results" (July 2012) ; "The gravity of the infringement was "above the average", which would draw the amount of the sanction upwards (September 2012).

[8] "We will adopt a statement of objections more or less in the coming couple of months"; "We have three banks and a broker being investigated on the Libor/Euribor case because they didn't want to settle and we are preparing the statement of objections and the next step will follow"; "Probably before the end of the mandate of this Commission there will be some news from this investigation" .

[9] "Parfois il y a besoin d'utiliser les instruments traditionnels de la politique de concurrence, et Libor/Euribor, c'est le cas. Parce qu'il y a un cartel. Un cartel organisé autour de la manipulation d'un benchmark" ; "Settling companies must come clean and pay for their mistakes" .

[10] "Although I expect hybrid cases to remain the exception, they allow us to use the settlement procedure without being held hostage to the strategies of the companies that prefer not to settle."

[11] The speech "Fighting against cartels: A priority for the present and for the future" is available on http://europa.eu/rapid/press-release_SPEECH-14-281_en.htm