European Union: European Commission's Foreign Exchange Spot Trading Cartel Decisions


On 16 May 2019, the European Commission ("Commission") has fined Barclays, The Royal Bank of Scotland (RBS), Citigroup, JPMorgan and MUFG Bank (formerly Bank of Tokyo-Mitsubishi) for taking part in two cartels in the Spot Foreign Exchange market for 11 currencies that are the most liquid and traded currencies worldwide – the Euro, British Pound, Japanese Yen, Swiss Franc, US Dollar, Canadian Dollar, New Zealand and Australian Dollars, and Danish, Swedish and Norwegian crowns1.

The first decision rendered by the Commission is on so-called Forex-Three Way Banana Split cartel, and it imposed a total fine of €811,197,000 on Barclays, RBS, Citigroup and JPMorgan. The second decision concerns the so-called Forex-Essex Express cartel, upon which the Commission imposed a total fine of €257,682,000 on Barclays, RBS and MUFG Bank. Although the UBS was involved in these cartels and was the addressee of these two decisions, since it applied for leniency to the Commission and revealed the existence of the cartels, it benefited from immunity from fines (€285 million).

Exchange of Commercially Sensitive Information between the Competitors: A Breach of Competition Law

Co-operation has a 'horizontal nature' if an agreement is entered into between actual or potential competitors2. Although information exchange, as a form of horizontal cooperation between competitors may create efficiency gains, it can also lead to restriction of competition. Based on the Commission's investigation in the market, it was revealed that some individual traders in charge of the Foreign Exchange ("Forex") spot trading of 11 currencies on behalf of the relevant banks exchanged commercially sensitive information, as well as trading plans.

Also, it was found that these traders, who were direct competitors, occasionally coordinated their trading strategies through various online professional chatrooms, like the Bloomberg terminals, throughout entire working days.

The commercially sensitive information exchanged in these chatrooms related to:

  • Outstanding customers' orders (i.e. the amount that a client wanted to exchange, and the specific currencies involved, as well as indications on which client was involved in a transaction);
  • Bid-ask spreads (i.e. prices) applicable to specific transactions;
  • Their open risk positions (the currency that was needed to buy or sell in order to convert their portfolios into their bank's currency); and
  • Other details of current or planned trading activities.

As per the above, it was clear that the traders had extensive conversations about a variety of subjects, including recurring updates on their trading activities. With these exchanges of information between the participating traders, they could coordinate with each other and were informed of market decisions as to whether to buy or sell the currencies they had in their portfolios, and when.

As a result of its investigation, the Commission was made aware of two separate infringements concerning foreign exchange spot trading. One of these is The Three Way Banana Split infringement that started on 18 December 2007, and which ended on 31 January 2013, made amongst traders from the UBS, Barclays, RBS, Citigroup and JPMorgan, through communications in three separate, consecutive chatrooms ("Three way banana split / Two and a half men / Only Marge"). The second infringement revealed by the Commission was The Forex-Essex Express that started on started on 14 December 2009, and which ended on 31 July 2012, made amongst traders from the UBS, Barclays, RBS and Bank of Tokyo-Mitsubishi (now MUFG Bank) in two chatrooms ("Essex Express 'n the Jimmy" and "Semi Grumpy Old men").

Cooperation by the Banks with the Commission

The Forex-Three Way Banana Split cartel and Forex-Essex Express cartel decisions are the settlement decisions of the Commission. Under the settlement procedure, the Commission may reward the parties who chose to acknowledge their involvement in the cartel and their liability for the same3. In return for this acknowledgement, the Commission may reduce the fine imposed on the parties by 10%4. In addition to the parties' cooperation with the Commission under the settlement procedure, the parties may also collaborate by voluntary production of evidence to trigger or advance the Commission's investigation, which was already covered by the leniency notice5.

In both the Forex-Three Way Banana Split and Forex-Essex Express cartels, the parties benefited from the settlement reduction (10%) and the leniency reduction that were applied cumulatively. In the Three Way Banana Split infringement, all banks involved benefited from reductions of their fines for their cooperation with the Commission investigation in terms of timing of their cooperation, and the extent to which they provided evidence. In the Forex-Essex Express infringement, all banks except one (MUFG Bank did not apply for leniency) benefited from reductions in their fines for their cooperation with the Commission investigation.


The decisions of the Commission are important since they are related to Forex spot trading activities that constitute one of the largest markets in the world. As pointed out by Commissioner Margrethe Vestager who is in charge of the competition policy, the Commission will not tolerate collusive behaviour in any sector of the financial markets. Following these decisions, any undertakings in the financial markets should pay more attention to their activities in the market so that their behaviour is not anti-competitive. Lastly, taking into the size of the Forex spot trading activities market, it seems that there might be a great number of persons or companies affected by these two cartels of the relevant banks who may bring the matter before the courts of the member states and seek damages.


[1] (Access date 18.06.2019). Any references in this Newsletter article regarding the two decisions of the Commission are referred to in the Commission's Press Release dated 16.05.2019.

[2] Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2011/C 11/01), para.1.

[3] (Access date 18.06.2019).

[4] (Access date 18.06.2019).

[5] (Access date 18.06.2019).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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