Two companies involved in an acquisition in the EU appear to have narrowly escaped a fine for providing misleading information to the European Commission (EC). The case provides a reminder that internal documents are very important in merger (and general antitrust) investigations in the EU. Documents must be carefully managed, and parties need to be prepared for rigorous questioning if their “story” does not match the internal contemporaneous record.

The case arose out of a notification to the EC under the EU Merger Regulation of a transaction under which Ahlstrom Corp. and Munksjö AB transferred their label and processing business to a new company. In February 2014, the EC sent a Statement of Objections (SO, a preliminary statement of case) to the parties indicating that they had provided misleading information in the course of the notification. The alleged misleading information was market share estimates submitted in the notification, which differed significantly from the companies’ pre-existing internal documents.

The companies were able to demonstrate that they had valid reasons to reassess their internal market estimates shortly before the notification. The EC accordingly dropped the case and the parties avoided a fine. However, there may well have been other indirect costs — for example, reputational damage and external legal costs, not to mention the internal effort needed to deal with the EC’s concerns.