Deutsche Börse's major competitor is the French Euronext, which has been building its strength in recent years through an aggressive acquisition strategy.
A new front is opening between France and Germany in the European Union, and this time the focus is on stock exchanges.
Specifically, the Commission opened an investigation into potential collusion between Deutsche Börse and Nasdaq regarding the listing, trading, and clearing of financial derivatives. However, the timing is of exceptional interest as France aspires to strengthen its position as a financial center and break the dominance of Frankfurt. In this context, the French Euronext has expanded into Italy, Norway, and Ireland since 2018, and recently submitted a bid to acquire ATHEX (Athens Stock Exchange).
The Commission's investigation
More analytically, the European Commission opened an investigation into potential collusion between Deutsche Börse and Nasdaq concerning the listing, trading, and clearing of financial derivatives.
The Commission is concerned that Deutsche Börse and Nasdaq may have agreed not to compete in the listing, trading, and clearing of certain derivatives. Brussels is also worried that they may have allocated market needs, coordinated prices, and exchanged commercially sensitive information.
"Competition rules help ensure fair and open competition between stock exchanges and ensure the proper functioning of the Capital Markets Union—a foundation for innovation, financial stability, and growth for the benefit of all European citizens," said EU competition chief, Teresa Ribera.
It is noted that Deutsche Börse is the largest stock exchange group in the EU by market capitalization, managing the Frankfurt Stock Exchange and Eurex, the largest derivatives trading venue in the region. The American group Nasdaq is one of the largest stock exchange groups globally.
Deutsche Börse vs Euronext
Deutsche Börse's major competitor is the French Euronext, which has been building its strength in recent years through an aggressive acquisition strategy.
If the cartel is proven, the German Eurex will face fines and potential structural changes, reducing its suffocating dominance in European derivatives. At the same time, however, Paris will be strengthened as the EU's financial center, during a period when France seeks to capitalize on the loss of London (Brexit) and surpass Frankfurt.
Fines
While the opening of a formal investigation does not prejudge its outcome, the Commission has the power to impose fines of up to 10% of a company's global annual sales for a violation. Companies could also be ordered to put an end to any conduct that continues to violate the bloc's cartel rules.
The raids on Deutsche Börse and Nasdaq
Today's escalation comes after surprise raids on the premises of Deutsche Boerse and Nasdaq across Europe in September 2024. These inspections took place a few months after Deutsche Boerse's European Energy Exchange AG canceled its plans to acquire Nasdaq's energy trading and clearing business in the Nordic countries, amid growing EU competition concerns over a deal that would solidify its role as the world's largest electricity exchange.
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