UBS Faces Pressure to Lower Cartel Penalty
In a significant development, the European Union's Court of Justice has reduced the fine imposed on Credit Suisse for participating in a long-standing currency trading cartel. The Swiss bank, which was initially fined €83.2 million, will now pay €28.9 million, a reduction of nearly two-thirds of the original amount.
The reduction in the fine is primarily due to errors in the calculation of the original fine by EU competition authorities. Specifically, the court found that certain data used by the EU Commission to determine the approximate value of Credit Suisse's turnover was less reliable compared to the turnover data provided by Credit Suisse itself during the proceedings. This meant the basic amount of the fine was set too high due to reliance on incomplete and less accurate data, breaching the Commission's own guidelines on fine calculation.
The court upheld the finding that Credit Suisse engaged in anti-competitive practices with other banks through coordinated trading strategies via a chatroom called “Sterling Lads” between 2011 and 2012. However, the penalty was reduced based on the corrected turnover figure. UBS, which acquired Credit Suisse, had sought to annul the fine entirely, but the court rejected removing it altogether, allowing the ruling to be appealed further if desired.
It is worth noting that the EU Court of Justice has not issued any guidelines for future calculations of fines in similar cases. Furthermore, the court has not imposed any additional penalties on Credit Suisse for its involvement in the currency trading cartel. The court has also not overturned the antitrust violations finding against Credit Suisse.
The court's decision does not provide any details on the process for Credit Suisse to appeal the decision or seek further review. However, it is important to highlight that the fine reduction pertains to past cartel sins and does not impact the deterrence of future cartel activities. The EU Court of Justice has not made any comments on the impact of the fine reduction on the deterrence of future cartel activities.
In conclusion, the EU Court of Justice has reduced the fine for Credit Suisse in the currency trading cartel case due to errors in the calculation of the original fine. The reduced fine of €28.9 million stands in contrast to the original fine of €83.2 million, marking a significant decrease in the penalty for Credit Suisse. The decision does not overturn the antitrust violations finding against Credit Suisse, but it does provide a lesson for EU competition authorities on the importance of accurate and reliable data in fine calculations.
The reduction in the fine for Credit Suisse's involvement in the currency trading cartel case is a result of errors in the initial fine calculation by EU competition authorities, particularly the reliance on incomplete and less accurate data. This ruling serves as a reminder for EU authorities to ensure accurate data is used in future fine calculations within the banking-and-insurance industry and beyond, affecting the business and finance sectors.
