Reinforcing Competitive Integrity In EU Financial Markets: Antitrust Enforcement In Derivatives And Market Infrastructure

Introduction

The financial services sector constitutes a structural backbone of the European Union's Single Market. Efficient capital allocation, consumer welfare, and systemic stability depend on competitive markets that function without collusion, market foreclosure, or the abuse of essential infrastructure. In this context, the European Commission ("Commission") has consistently relied on Article 101 of the Treaty on the Functioning of the European Union ("TFEU") to detect, deter, and dismantle anti-competitive practices, adopting a rigorously enforcement-oriented approach in areas where market opacity and concentration exacerbate cartel risks.¹

At the centre of these enforcement efforts are interest rate derivatives—such as forward rate agreements, swaps, futures, and options—which constitute indispensable risk-management instruments for banks and corporations exposed to interest rate fluctuations. The value of these products is typically linked to benchmark interest rates, most notably the Euro Interbank Offered Rate ("EURIBOR") for the euro and the London Interbank Offered Rate ("LIBOR") for various currencies, including the Japanese yen ("JPY"). These benchmarks, calculated on the basis of daily submissions by panels of contributing banks, form the foundational reference points for a vast array of global financial contracts.

Given the intensity of competition among investment banks in the trading of interest rate derivatives, the integrity of these benchmarks is of critical importance. Any distortion in benchmark levels directly affects the cash flows exchanged between counterparties. Accordingly, in the period following the benchmark manipulation scandals, the Commission launched a series of landmark investigations addressing collusion in wholesale derivatives markets and foreclosure in market data infrastructure. Taken together, these decisions highlight both the susceptibility of financial markets to coordination failures and the Commission's evolving enforcement toolkit in addressing increasingly sophisticated forms of anti-competitive conduct in markets where even marginal benchmark distortions may generate systemic global effects.

I. Cartel Enforcement in Financial Derivatives Markets

Wholesale derivatives markets are characterized by high transaction values, limited transparency, and heavy reliance on reference benchmarks. These structural features make them a fertile environment for covert collusion. The Commission's investigations into interest rate and foreign exchange derivatives cartels exemplify intervention in markets where even small distortions can have systemic consequences.²

The Yen Interest Rate Derivatives ("YIRD") Cartel

The YIRD investigation exposed a hard-core cartel where traders used closed chatrooms to coordinate behavior. In 2013, the Commission fined institutions including UBS, RBS, Deutsche Bank, Citigroup, JPMorgan, and RP Martin for bilateral cartels in this sector.³ This was further extended in 2015 when the Commission fined the broker ICAP €14.9 million for facilitating these cartels. ICAP's role was pivotal; it disseminated misleading "expectations" to panel banks to influence JPY LIBOR rates and served as a communications channel between competing traders.⁴ Based on these investigations, the conducts could be classified as:

• Disclosure of Pricing Intentions and Bid-Ask Spreads: Traders shared forward-looking pricing strategies, undermining independent decision-making and eliminating competitive uncertainty.
• Exchange of Confidential Client Order Information: Details about specific client positions allowed coordinated responses that pre-empted market movements.
• Manipulation of Benchmark Submissions: Collusive interactions sought to influence Yen-LIBOR, distorting both derivatives pricing and the functioning of interconnected financial markets.

Conduct of this nature constitutes a per se infringement under Article 101(1) of TFEU, as its object is inherently anti-competitive. Beyond direct overcharges, such collusion erodes investor confidence, reduces liquidity, and distorts the price formation mechanisms essential for efficient risk-management.

Connection to Euro Interest Rate Derivatives ("EIRD")

Parallel investigations into EIRD demonstrated that benchmark-linked collusion was systemic. In 2013, the Commission reached a settlement totaling €1.49 billion with banks like Barclays, Deutsche Bank, RBS, and Société Générale for manipulating EURIBOR.⁵ For those who chose not to settle—Crédit Agricole, HSBC, and JPMorgan Chase—the Commission imposed an additional €485 million in fines in 2016.⁶

A relatively small group of structurally important banks occupied pivotal positions across multiple derivatives markets, amplifying the potential impact of coordinated conduct. These cases illustrate why aggressive antitrust enforcement was considered indispensable, even in markets already subject to financial regulation. While the "by object" classification facilitates enforcement, it also raises concerns about over-inclusiveness in highly technical markets. Future cases may require a more explicit articulation of harm where information exchanges are intertwined with legitimate risk-management practices.⁷

II. Listing, Trading and Clearing of Market Infrastructure

Modern financial markets rely heavily on data, licensing rights, clearing mechanisms, and trading platforms. When such inputs are controlled by a small group of incumbents, there is a substantial risk of refusal to supply, exclusive licensing, and other foreclosure strategies capable of excluding innovative entrants.

The Credit Default Swaps ("CDS") Market Data Case

In the CDS investigation, the Commission found that major financial institutions and data providers collectively restricted access to essential intellectual property and real-time market data needed by prospective exchanges and clearing houses.⁸ This conduct had two principal effects:

• Foreclosure of New Market Entrants: Without licenses and proprietary data, new trading venues could not viable compete, entrenching the incumbents' near-monopoly in single-name CDS clearing.
• Protection of Economic Rents: High clearing fees and limited innovation persisted because competitive pressure was artificially suppressed.

The Commission's intervention in the CDS case underscores that abusing dominance over information and infrastructure stifles innovation and artificially inflates costs. Ultimately, this highlights that ensuring open access to digital and physical gateways is vital for maintaining robust free-market dynamics and protecting the interests of all market participants.

Investigation on Possible Collusion between Deutsche Börse and Nasdaq

This focus on infrastructure continues into 2025, as the European Commission has recently opened a formal antitrust investigation to assess whether Deutsche Börse and Nasdaq have breached EU competition rules by coordinating their conduct in the sector for listing, trading and clearing of financial derivatives in the European Economic Area ("EEA"). Nasdaq and Deutsche Börse are financial services providers operating large exchanges in the financial derivatives sector. Within the Deutsche Börse Group, Eurex is responsible for the listing, trading and clearing of derivatives. Eurex is the largest derivatives exchange in the EEA.⁹

The Commission is concerned that Deutsche Börse and Nasdaq entities may have entered into agreements or concerted practices not to compete in the EEA for the listing, trading and clearing of certain derivatives. In addition, the Commission is concerned that the entities may have allocated demand, coordinated prices, and exchanged commercially sensitive information. If proven, this behaviour may breach EU competition rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union ('TFEU') and Article 53 of the EEA Agreement).

Conclusion

The European Commission's rigorous application of Article 101 TFEU within the financial sector underscores a fundamental shift from traditional price-fixing oversight to a broader defense of systemic market integrity. By dismantling cartels in the derivatives and benchmark sectors, the Commission has signaled that technical complexity and opacity will no longer serve as shields for collusive behavior. Furthermore, the strategic focus on market infrastructure and data foreclosure demonstrates an understanding that competition is not only stifled by secret agreements but also by the control of essential digital and physical gateways. As financial markets become increasingly data-driven and concentrated, the Commission's toolkit must continue to balance aggressive enforcement with a nuanced understanding of legitimate risk management.

Footnotes

1. Consolidated Version of the Treaty on the Functioning of the European Union [2012] OJ C326/47, art 101.
2. See Jonathan Faull and Ali Nikpay, The EU Law of Competition (3rd edn, Oxford University Press 2014) 14.152.
3. Yen Interest Rate Derivatives (YIRD) (Case AT.39861) Commission Decision of 4 December 2013.
4. ICAP (Yen Interest Rate Derivatives) (Case AT.39861) Commission Decision of 4 February 2015; see also Case T-180/15 ICAP v Commission [2017] ECLI:EU:T:2017:795.
5. Euro Interest Rate Derivatives (EIRD) (Case AT.39914) Commission Decision of 4 December 2013 (Settlement).
6. Euro Interest Rate Derivatives (EIRD) (Case AT.39914) Commission Decision of 7 December 2016 (Non-settling parties).
7. See Case C-307/18 Generics (UK) and Others [2020] ECLI:EU:C:2020:52, regarding the strict interpretation of "by object" restrictions.
8. Credit Default Swaps – Market (Case AT.39745) Commission Decision of 20 July 2016 (Commitments decision).
9. European Commission, 'Commission opens investigation into possible anti-competitive conduct by Deutsche Börse and Nasdaq' (Press Release, 2025).

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