On 6 February 2014, Joaquin Almunia, Vice President of the Commission responsible for Competition Policy, gave a speech at University College London on competition in financial markets. He commented that the EU internal market and the implementation of EU competition law are key public policy instruments to restore the health of the EU economy back to its pre-crisis levels but that there was still along way to go.

He believed that a competitive and open internal market was crucial to Europe’s businesses and consumers and would create the best possible conditions for sustainable growth. What the EU needs, in his opinion, was a deeper and broader internal market together with the robust enforcement of competition rules. He rejected calls by some for protectionism or to go soft on competition control during years of economic crisis. Instead he emphasised it is important to respond in a pro-active way to globalisation by improving EU competitiveness creating more efficient companies and promoting productivity. It also encouraged efficiency, investment and innovation in the economy at large. For this reason EU financial markets remain a top antitrust enforcement priority

The role of competition law was vital to ensure that the single market works as it was meant to. He mentioned the Commission’s work in antitrust, mergers and state aid. He pledged the Commission to continue its work to open up markets in banking and finance. Financial markets remain fragmented across Europe, which impedes the free flow capital across national borders. He highlighted the fact that venture capital markets were a particular source of concern to the Commission.

Competition law has played and will continue to play a “corrective” role involving intervention only after companies adopt anti-competitive and illegal practices. He singled out the Commission’s role in tracking down cartels in the markets for interest rate derivatives , imposing fines totalling EUR1.7 billion on seven international banks and a broker. The Commission’s enforcement activities also extended to other illegal practices, such as abuses of a dominant position. He referred to the Commission’s intervention in 2012 when it persuaded Thomson Reuters, a leading provider of financial information, to change its practices to make it easier for customers to switch to other providers. This case was resolved by acceptance of commitments, showing that not all antitrust decisions result in the imposition of fines.

Finally Vice- President Almunia voiced his support for dealing with cases by the use of commitments which can be a good option for restoring good competitive conditions quickly, especially in fast-moving markets.

By way of comment one can clearly see the Commission’s appetite for dealing with cases whether in the financial markets or not by way of commitments is still strong. However the increasing use of commitments by the Commission appears to be at odds with its attempts to encourage companies to commence private litigation to recover damages for breach of competition law. As commitments do not amount to an admission that the competition rules have been infringed liability is not decided and follow on actions are not possible.

For further details on Joaquin Almunia’s speech entitled “Opening a Path for Recovery: Competition in Financial Markets”, University College London, 6 February 2014 see below