Clearstream loses EC case

THE second-highest court in Europe yesterday upheld a ruling by the European Commission (EC) that Deutsche Boerse&rsquo;s settlement arm Clearstream had abused its dominant market position.<br /><br />The decision by the Luxembourg-based Court of First Instance poured cold water on Clearstream&rsquo;s appeal against a 2004 EC ruling that it took advantage of its market share by refusing to supply clearing and settlement services to Euroclear Bank and charging discriminatory prices.<br /><br />&ldquo;The Court of First Instance dismisses the action brought against the Commission&rsquo;s decision, finding that Clearstream unlawfully refused to provide certain financial services to Euroclear,&rdquo; the court said.<br /><br />&ldquo;Clearstream abused its dominant position on the market in the provision of primary clearing and settlement services related to securities issued in Germany,&rdquo; it added.<br /><br />Clearstream did not incur a fine after the initial ruling, because the EC said there was insufficient community case law to conduct a proper analysis of clearing and settlement.<br /><br />Clearstream, a wholly-owned subsidiary of Deutsche Boerse, is responsible for the execution of stock trading mainly in Frankfurt as well as on electronic exchange Xetra.<br /><br />It was created in January 2000 with the merger of Cedel International and Deutsche Boerse Clearing and later bought out entirely by the Frankfurt stock exchange owner, which paid &euro;1.6bn (&pound;1.4bn) for the remaining 50 per cent in 2002.<br /><br />The platform is no stranger to controversy, having been falsely accused in a 2001 book called R&eacute;v&eacute;lation$ of being an international hub for money laundering and tax evasion.