Investigation Focuses on Suspected Collusion and Information Sharing

The European Commission has initiated a formal antitrust investigation into Deutsche Boerse AG and Nasdaq Inc., examining their operations in derivatives trading. Regulators suspect that both companies may have engaged in practices to limit competition within the European market.

Specifically, authorities are scrutinizing whether the exchanges colluded to divide demand and coordinate pricing strategies. There is also an examination into the possibility that the companies shared sensitive commercial information to facilitate these arrangements.

The investigation encompasses the trading, listing, and clearing of financial derivatives across the European Economic Area. Derivatives are financial instruments whose value is derived from underlying assets such as stocks, bonds, or commodities.

This formal probe follows unannounced inspections conducted by authorities at company offices throughout Europe in September 2024. These raids were instrumental in gathering preliminary evidence that has now led to the full investigation.

The suspected conduct, if proven, would constitute a breach of Article 101 of the Treaty on the Functioning of the EU, which prohibits anti-competitive agreements and concerted practices, commonly known as cartel behavior. The European Commission has confirmed that the case is now under comprehensive examination and could result in significant sanctions.

Potential Sanctions and Market Impact

If violations are confirmed, regulators have the authority to impose fines on companies, potentially reaching up to 10% of their global annual turnover. Furthermore, the Commission may mandate an immediate cessation of any ongoing anti-competitive practices.

This investigation is particularly relevant given a previously canceled deal between Deutsche Boerse’s European Energy Exchange and Nasdaq’s Nordic power business. That proposed transaction had previously raised competition concerns within the European Union.

The announcement of the investigation had a noticeable impact on the stock market. Deutsche Boerse's shares experienced a significant drop, falling as much as 7.3%, marking their steepest decline since April 2023. Nasdaq also saw a decline, with its shares dropping 2.3% during U.S. pre-market trading hours.

This case is part of a broader trend of antitrust actions targeting the financial services sector in Europe over the past decade. Previous investigations have addressed issues such as benchmark manipulation and collusion among market participants.

The European Commission has reiterated that the opening of an investigation does not presuppose any finding of guilt. However, the officials are steadfast in their commitment to enforcing fair competition across all European markets.