BPCE - 2019 RISK REPORT Pillar III

10 LEGAL RISKS

LEGAL AND ARBITRATION PROCEEDINGS – BPCE

Legal and arbitration proceedings – BPCE 10.1

Check imaging exchange (échange image chèques) commissions

Marketplace antitrust case initially involving Banques Populaires Participations (BP Participations) and Caisses d’Epargne Participations (CE Participations) and BPCE since it merged with and absorbed BP Participations and CE Participations. On March 18, 2008, BFBP and CNCE received, as was the case for other banks on the marketplace, a notice of grievance from the French anti-trust authority. The banks are accused of having established and mutually agreed on the amount of the check imaging exchange commission, as well as related check commissions. The anti-trust authority delivered its decision on September 20, 2010 to fine the banks found guilty (€90.9 million for BPCE). These banks (except for the Banque de France) lodged an appeal. On February 23, 2012, the Paris Court of Appeals overruled the anti-trust authority’s decision and the €90.9 million fine paid by BPCE was refunded. On March 23, 2012, the anti-trust authority launched an appeal of the Court of Appeals’ ruling. On the referral of the anti-trust authority, on April 14, 2015, the Court of Cassation overturned the Court of Appeals’ 2012 ruling due to breach of procedure. The banks were once again required to pay the fine.

BPCE, along with the other accused banks, referred this ruling to the Paris Court of Appeals, requesting that it purge this breach of procedure and uphold its 2012 decision, ensuring that BPCE will ultimately be reimbursed. The Second Court of Appeals ruled on December 21, 2017 and confirmed the 2010 analysis of the anti-trust authority, thus contradicting the initial decision by the Paris Court of Appeals in 2012. The Court considered that the introduction of the EIC commission and CSCs constitute anti-competitive practice in its nature and upheld the conviction to pay the fine set by the ADLC. However, the Court reduced the amount of Caisse d’Epargne’s fine by €4.07 million, by canceling the 10% increase to the fine imposed by ADLC on certain banks for their key roles in negotiations. BPCE, standing in for CE Participations, should retrieve this amount of €4.07 million from the Treasury. On January 22, 2018, the banks filed an appeal with the Court of Cassation. On January 29, 2020, the Court of Cassation rendered its verdict and overturned the appeal for lack of legal grounds on the demonstration of collusion. The ruling referred the case back to the Court of Appeal, with the banks returning to their position subsequent to the ADLC (anti-competition authority) ruling. Consequently, the Court of Appeal will have to issue a ruling in favor of Caisse d’Epargne before the fine will be reimbursed.

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RISK REPORT PILLAR III 2019 | GROUPE BPCE

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