Recent EU Antitrust Investigations into Financial Services” What Is the Scope for Antitrust Intervention?

Katarzyna Czapracka, Mark Powell, Jul 28, 2011

Like their U.S. counterparts, the EU antitrust enforcers have decided to probe practices that attracted criticism in the wake of the recent economic and financial turmoil. The Commission has opened two investigations into the functioning of the CDS market. It is also looking into possible misconduct with respect to the setting of LIBOR in times of financial crisis. The focus of these new investigations is markedly different from the Commission’s previous enforcement efforts, which, until recently, have been focused on the payment card sector (which has been among the subjects of the Commission’s financial services sector enquiry that was closed in 2007). Having reached an agreement with VISA on the Multilateral Interchange Fee, the Commission seems to focus now on wholesale banking and on practices that may impede access to market data and decrease market transparency.

This note gives more background on the antitrust enforcement actions recently initiated by the Commission in the financial industry and attempts to identify the Commission’s likely concerns.