General Court confirms the prohibition of Deutsche Börse and NYSE Euronext merger

The Court confirmed on 09.03.2015 in its case T-175/12 Deutsche Börse AG vs Commission the decision of the European Commission (“Commission”) COMP/M.6166 Deutsche Börse / NYSE Euronext from 01.02.2012, which prohibited a merger between Deutsche Börse AG (“Deutsche Börse”) and NYSE Euronext (“NYSE”).

NYSE is a US holding company which is active on the US and European stock exchange market. The trade of derivatives is one of its main segments. NYSE trades its derivatives over its exchange platform NYSE Liffe (“Liffe”), which has its headquarters in London. Furthermore, Liffe operates the trade of financial derivatives in Paris, Amsterdam, Brussels and Lisbon.

Deutsche Börse is a German listed corporation which also trades derivatives throughout the European economic area through its subsidiary Eurex Frankfurt AG (“Eurex”), which is a subsidiary of Eurex Zürich AG. The clearing-house of Deutsche Börse, Eurex Cleaning AG, which ultimately operates the transactions of Deutsche Börse, is a subsidiary of Eurex.

Deutsche Börse and NYSE compete on the trading market of derivatives through their exchange-platforms. Both companies operate the world’s largest derivatives exchanges (Eurex and Liffe) conducting together the trading and clearing of over 90% of the worldwide exchange of European derivatives.

Hence, the Commission analyzed the potential harm to competition that could result from the merger on the financial markets on which both companies compete. According to the decision of the Court, the Commission correctly concluded that exchange-traded derivatives (“EDT”) and over-the-counter derivatives (“OTC”) build two separate, independent markets.

The envisaged merger would have affected significantly the markets of the European interest rate, single equity derivatives and equity index derivatives. According to the decision of the Commission, the envisaged merger would have lead to either a dominant or near-monopoly position of Deutsche Börse through the merger with NYSE, where 90% of the global exchange-traded derivatives would be dealt by the European subsidiary of Deutsche Börse.

Deutsche Börse and NYSE are the most important competitors on these markets. A merger between those would not only exclude competition between them, but also create an entry barrier for new, future competitors. Furthermore, it would reduce the incentive for introducing further innovations in technology, process and design on those markets. Since Deutsche Börse was not able to proof sufficient efficiencies resulting from such merger, which would outweigh the determined harm to competition, the proposed transaction was prohibited.


Dr. Christina Hummer

Ori Kahn