HSBC Holdings plc and Others v European Commission (T-561/21)

Contents

Judgment of the General Court (Seventh Chamber)27 November 2024^note(Competition — Agreements, decisions and concerted practices — Euro Interest Rate Derivatives sector — Decision establishing an infringement of Article 101 TFEU and Article 53 of the EEA Agreement — Failure to discharge the obligation to state reasons — Annulment in part of the decision by a judgment of the General Court — Amending decision — Fines — Limitation — Basic amount — Value of sales — Article 23(2) and (3) of Regulation (EC) No 1/2003 — Equal treatment — Proportionality — Unlimited jurisdiction)In Case T‑561/21,HSBC Holdings plc, established in London (United Kingdom),HSBC Bank plc, established in London,HSBC Continental Europe, established in Paris (France),represented by M. Demetriou and D. Bailey, Barristers-at-Law, C. Angeli, M. Giner Asins and C. Chevreste, lawyers, and by M. Simpson, Solicitor,vEuropean Commission, represented by T. Baumé, P. Berghe and M. Farley, acting as Agents,THE GENERAL COURT (Seventh Chamber),composed of K. Kowalik-Bańczyk, President, E. Buttigieg (Rapporteur) and G. Hesse, Judges,Registrar: M. Zwozdziak-Carbonne, Administrator,having regard to the written part of the procedure, in particular:– the decision of 21 December 2021 to stay the proceedings pursuant to Article 69(d) of the Rules of Procedure of the General Court until delivery of the judgment in Case C‑883/19 P, HSBC Holdings and Others v Commission,– the judgment of 12 January 2023, HSBC Holdings and Others v Commission (C‑883/19 P, EU:C:2023:11), and the observations of the parties on that judgment, submitted in the reply and rejoinder,– the judgments of 20 December 2023, JPMorgan Chase and Others v Commission (T‑106/17, under appeal, EU:T:2023:832), and of 20 December 2023, Crédit agricole and Crédit agricole Corporate and Investment Bank v Commission (T‑113/17, under appeal, EU:T:2023:847), and the observations of the parties on those judgments,further to the hearing on 25 January 2024,gives the following

JudgmentOnly the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here.

1By their action based on Article 263 TFEU, the applicants, HSBC Holdings plc, HSBC Bank plc and HSBC Continental Europe (together ‘HSBC’), seek, first, the annulment of Article 1 of Commission Decision C(2021) 4600 final of 28 June 2021 amending Commission Decision C(2016) 8530 final of 7 December 2016 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39914 – Euro Interest Rate Derivatives) (‘the 2021 Decision’) and the annulment of Article 2(b) of Commission Decision C(2016) 8530 final of 7 December 2016 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case AT.39914 – Euro Interest Rate Derivatives (EIRD)) (‘the 2016 Decision’), as amended, and, second, in the alternative, a reduction in the amount of the fine imposed on them in the 2021 Decision.…

Forms of order sought

16The applicants claim, in essence, that the Court should:– annul Article 1 of the 2021 Decision and Article 2(b) of the 2016 Decision, as amended;– in the alternative, substantially reduce the fine imposed on the applicants to such amount as the Court may deem appropriate; and– order the Commission to pay the applicants’ costs or, in the alternative, an appropriate proportion of the applicants’ costs.

17The Commission contends that the Court should:– dismiss the action;– order the applicants to pay the costs.

Law…

The claim seeking annulment of Article 1 of the 2021 Decision and Article 2(b) of the 2016 Decision, as amended

The first plea, alleging infringement of the limitation period for imposing a fine on HSBC

36In the first plea, the applicants submit that the 2021 Decision was adopted outside the 10-year limitation period provided for in Article 25(5) of Regulation No 1/2003. They submit, in essence, that that limitation period was not suspended pursuant to Article 25(6) of Regulation No 1/2003, by the Commission bringing an appeal in Case C‑806/19 P (see paragraph 8 above), in so far as, already on that date, the Commission intended to adopt a new decision against HSBC without awaiting the outcome of the appeal. According to the applicants, the Commission could not bring the appeal with the sole objective of suspending the limitation period in order to obtain an additional period to adopt a new decision in the meantime. That appeal, brought for an inappropriate purpose, is moot and did not suspend the limitation period.

37In addition, according to the applicants, even if the appeal brought by the Commission had suspended the limitation period from 31 October 2019, that suspension came to an end in any event upon the sending of the letter of 8 May 2020 when the Member of the Commission responsible for competition notified HSBC of her intention to propose to the College of Commissioners that a new decision addressed to HSBC be adopted (see paragraph 9 above). According to the applicants, on that date, the Commission demonstrated that it was not ‘prevented’ from acting notwithstanding the extant appeal. Its interest in the outcome of the appeal disappeared when it took steps to adopt a new decision against HSBC.

38The Commission disputes the applicants’ arguments.

39In that regard, the Court notes that the object of Article 25 of Regulation No 1/2003 is to introduce rules governing the time limits within which the Commission is entitled, without undermining the fundamental requirement of legal certainty, to impose fines and periodic penalty payments on undertakings which are the subject of procedures for the application of the EU competition rules (judgment of 21 January 2021, Whiteland Import Export, C‑308/19, EU:C:2021:47, paragraph 38). That provision is the result of the reconciliation by the EU legislature, in the exercise of the powers conferred on it, of two objectives potentially requiring conflicting measures, namely, first, the need to ensure legal certainty by preventing situations which arose a long time previously from being indefinitely brought into question and, second, the requirement to ensure observance of the law by pursuing, establishing and penalising infringements of EU law (see, to that effect, judgment of 9 November 2022, Ferriere Nord v Commission, T‑667/19, under appeal, EU:T:2022:692, paragraph 354 and the case-law cited).

40Under Article 25(2), (3) and (5) of Regulation No 1/2003, the Commission’s power to impose a fine is to expire, where the Commission has taken actions to investigate or bring proceedings in respect of an infringement, at the latest ten years from the day when the continuing or repeated infringement ended. In addition, Article 25(6) of Regulation No 1/2003 provides that the limitation period is to be suspended for as long as the decision of the Commission is the subject of proceedings pending before the Court of Justice of the European Union. Under paragraph 5 of that article, the limitation period of 10 years is to be extended by the time during which limitation is suspended pursuant to paragraph 6 of that article.

41In the present case, the parties are in agreement that the limitation period began to run, in accordance with Article 25(2) of Regulation No 1/2003, on 27 March 2007, that is to say, on the date on which the single and continuous infringement the applicants were found to have committed came to an end. The Commission adopted the 2016 Decision on 7 December 2016, which was 9 years, 8 months and 10 days after the infringement came to an end. The parties are also in agreement that the limitation period was suspended, in application of Article 25(6) of Regulation No 1/2003, with effect from 17 February 2017, the date on which the action in Case T‑105/17 was brought, that is to say, 9 years, 10 months and 20 days after the infringement came to an end, until the judgment in that case was delivered on 24 September 2019. On that date, in the light of the maximum limitation period of 10 years laid down in Article 25(5) of Regulation No 1/2003, the Commission had 1 month and 11 days to adopt a new decision imposing a fine.

42On 31 October 2019, that is to say, 1 month and 7 days after the delivery of the judgment of 24 September 2019, HSBC Holdings and Others v Commission (T‑105/17, EU:T:2019:675), the Commission brought the appeal in Case C‑806/19 P.

43The 2021 Decision was adopted on 28 June 2021 while the proceedings in Case C‑806/19 P concerning the appeal lodged by the Commission were pending before the Court of Justice.

44In order to determine whether the limitation period had expired when the 2021 Decision was adopted, as the applicants submit, it is necessary to determine, in the light of the arguments which they put forward in that regard, first, whether the appeal brought by the Commission in Case C‑806/19 P had the effect of suspending the limitation period at issue and, second, whether that suspension, if established, continued until that decision was adopted. It is not disputed that, on the date on which the Commission brought the appeal, the limitation period had not yet expired.

45In that regard, the Court notes that, under Article 25(6) of Regulation No 1/2003, the limitation period is to be suspended for as long as the decision of the Commission is the subject of proceedings pending before one of the EU Courts. It is unambiguously clear from the above that a suspension of the limitation period under that provision is based on an objective circumstance, which exists in the present case, where court proceedings are pending (see, to that effect, judgment of 29 March 2011, ArcelorMittal Luxembourg v Commission and Commission v ArcelorMittal Luxembourg and Others, C‑201/09 P and C‑216/09 P, EU:C:2011:190, paragraph 141 and the case-law cited). Contrary to what emerges, in essence, from the applicants’ arguments, that provision does not make that suspension subject to any subjective condition, such as an ‘objective’ pursued by the lodging of the action or the ‘intention’ of the party bringing it.

46In that context, the Court also recalls that Article 25(6) of Regulation No 1/2003 protects the Commission against the effect of the limitation period in situations in which it must await the decision of the EU Courts in proceedings beyond its control before it knows whether the contested measure is or is not unlawful (see, to that effect, judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraphs 144 and 151).

47The notion that the Commission is ‘prevented’ from taking action, to which reference is made in the case-law (see, to that effect, judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraph 144), as relied on by the applicants, is not to be understood as referring to situations where it is absolutely impossible for the Commission to undertake preparatory actions, as it did in the present case, with a view to the potential adoption of a new decision in order to comply with a judgment of the Court in which it found the Commission’s decision to be unlawful. That notion of being ‘prevented’ is an objective circumstance that relates to whether there are pending court proceedings as a result of which there is uncertainty as to the lawfulness of the Commission’s decision.

48In the present case, by bringing the appeal in Case C‑806/19 P, the Commission asked the Court of Justice to assess the lawfulness of Article 2(b) of the 2016 Decision, which was called into question by the General Court in the judgment of 24 September 2019, HSBC Holdings and Others v Commission (T‑105/17, EU:T:2019:675). While the proceedings relating to that appeal were pending, there was uncertainty as to the lawfulness of that provision of the 2016 Decision.

49It is true, as the applicants submit, in essence, that the Court has consistently held that for an appellant to have an interest in bringing proceedings the appeal must be capable, if successful, of procuring an advantage to the party bringing it (see judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 46 and the case-law cited). However, while the absence of such an interest in bringing proceedings at the time when the action was brought – assuming that it were established – could lead an appeal to be dismissed as inadmissible, and while, if the interest in bringing proceedings were to fall away in the course of the proceedings, this could lead the Court of Justice to rule that there was no need to give judgment, such a circumstance cannot retroactively cancel the suspension of the running of the limitation period in respect of the Commission’s power to impose fines which occurred because appeal proceedings were initiated. It is precisely the fact that an action is pending before the General Court or the Court of Justice that justifies the suspension, and not the conclusions reached by those courts in their decision bringing the proceedings to an end (see, to that effect, judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraph 153).

50It follows that, contrary to what the applicants claim, the Commission’s lodging of the appeal had the effect of suspending the limitation period in respect of its power to impose fines on them until the Court of Justice adopted a decision bringing the proceedings in that case to an end (see, to that effect, judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraphs 147 and 157), irrespective of the steps it took with a view to adopting the 2021 Decision while those appeal proceedings were pending.

51In any event, the applicants cannot validly claim that the Commission’s interest in knowing the outcome of its appeal ceased on 8 May 2020, the date on which it expressed its intention to adopt a new decision against HSBC. The Court of Justice has acknowledged that the mere act of proposing a measure in order to comply with a judgment of the General Court cannot, as such, be interpreted as definitive and formal acquiescence on the part of the Commission to the judgment of the General Court concerned and does not, as such, mean that any interest on the part of the Commission in bringing an appeal and in the result of the case has ceased (see, to that effect, judgments of 8 January 2002, France v Monsanto and Commission, C‑248/99 P, EU:C:2002:1, paragraph 31, and of 13 June 2013, Versalis v Commission, C‑511/11 P, EU:C:2013:386, paragraph 125).

52Similarly, in the present case, the mere fact of having taken steps to adopt a new decision following the delivery of the judgment of 24 September 2019, HSBC Holdings and Others v Commission (T‑105/17, EU:T:2019:675), does not show that the Commission lost all interest in seeking a declaration that Article 2(b) of the 2016 Decision was lawful, since that interest continued until the Court of Justice adopted a decision bringing the proceedings to an end or, at the very least, until that new decision was adopted. The fact that, after the 2021 Decision was adopted, the Commission withdrew its appeal in Case C‑806/19 P (see paragraph 14 above) does not in any way alter that conclusion.

53Furthermore, the Court finds that only a decision adopted by the College of Commissioners contains a definitive and formal position of the Commission, which is not the case for information provided or statements of intent made by the Commissioner responsible for competition matters regarding the adoption of such a decision, as the Commission correctly pointed out in its letter to the applicants of 8 May 2021.

54In the light of all the findings above, the Commission’s exercise of its power to impose penalties in respect of the applicants’ unlawful conduct was not time-barred at the time of the adoption, on 28 June 2021, of the 2021 Decision, given that the appeal proceedings in Case C‑806/19 P were pending before the Court of Justice.

55Accordingly, the first plea must be rejected as unfounded.…

Costs

252Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

Operative part

On those grounds,THE GENERAL COURT (Seventh Chamber)hereby:

1.Dismisses the action;

2.Orders HSBC Holdings plc, HSBC Bank plc and HSBC Continental Europe to pay the costs.

Delivered in open court in Luxembourg on 27 November 2024.