The European Commission (EC) enjoys broad investigative powers in order to uncover cartel conduct.  This has been confirmed in a series of rulings by the EU Courts in Luxembourg throughout the years (see our note).  Therefore, it comes as no surprise that, on November 25 and 26, 2014, the EU General Court (GC) issued two judgments rejecting the actions brought against the EC by Orange (Case T-402/13) and Energetický a průmyslový holding and EP Investment Advisors (together, EPH) (Case T-272/12), regarding surprise inspections (dawn raids) carried out at their premises. 

EC’s Dawn Raid Powers Not Necessarily Restricted Due to Previous Investigations at National Level 

Orange contested the proportionality and necessity of the inspection decisions on the basis of which the EC carried out dawn raids at its premises.  Following an investigation into allegations of infringement that were identical to those of the EC, the French Competition Authority (FCA) had already adopted a commitment decision vis-à-vis Orange.  The company therefore argued that the EC should have (i) examined the information in the FCA’s file prior to conducting the dawn raid and (ii) only sought to collect supplementary information to that already in the FCA’s file during its dawn raid. 

The GC rejected Orange’s arguments.  To begin with, it highlighted that the EC may at any time take a decision pursuant to Article 101 or 102 of the Treaty on the Functioning of the EU (TFEU), even if such a decision (i) concerns an agreement or practice which already forms part of a national competition authority (NCA) decision and/or (ii) conflicts with a previously adopted NCA decision.  In particular, the GC clarified that the fact that the EC may have chosen not to oppose a draft commitment decision by a NCA, does not mean that the EC cannot subsequently initiate its own investigation on the same conduct and potentially reach a different conclusion. 

In this case, the GC conceded that not only was it possible for the EC to have requested the communication of certain information from the FCA’s case file, but also that the EC could have legally used such information as evidence in its own investigation.  The GC found that while the EC’s choice not to consult the FCA’s case file was “regrettable,” it did not render the EC inspection decisions illegal.  According to the GC, the consultation of the FCA’s case file did not constitute an alternative to the EC dawn raids: the information in the FCA’s case file was voluntarily submitted by Orange, rather than being collected through a FCA dawn raid.  As a result, in all likelihood, the FCA’s case file did not include the evidence sought by the EC, which by its very nature would have been kept secret. 

The GC added that the fact that the EC may have already possessed indicia of potentially anticompetitive behavior did not prevent it from legitimately seeking to acquire supplementary information through a dawn raid.  Such information might allow the EC to reach more accurate findings as regards the extent and duration of the suspected infringement. 

Tampering with Electronic Evidence: an Obstruction of EC Dawn Raids in Itself 

EPH contested a procedural fine imposed on it by the EC due to EPH’s alleged refusal to submit to an EC dawn raid (see our note).  Specifically, following the notification of the EC inspection decision to EPH, the EC inspectors requested that certain e-mail accounts be blocked until further notice.  New passwords only known to the EC inspectors were set, so that the EC inspectors could search the relevant e-mail accounts without employees tampering with them.  However, on the second day of the dawn raid, the EC inspectors discovered that the password for one of the accounts had been modified.  In addition, the EC inspectors found out that instructions had been given to divert all incoming e-mails of specific individuals to a separate computer server, which caused such e-mails to be invisible to the EC inspectors.  While EPH did not challenge the facts on the basis of which the fine was imposed, it argued that (i) the two incidents resulted from mere inadvertence and (ii) the EC had not adequately proven that the two incidents had resulted in the relevant business records being incomplete. 

The GC rejected EPH’s arguments and upheld the fine imposed by the EC.  Regarding the modification of the e-mail account password, the GC noted that the mere fact that the EC inspectors did not obtain exclusive access to the relevant e-mail account, as requested, was sufficient to characterize this incident as a refusal to submit to an inspection.  The EC only had to prove that the access to the e-mail account was not exclusive – which it did – and was under no obligation to prove that the data in the e-mail account was in some way manipulated or deleted. 

Similarly, in respect to the diversion of incoming e-mails to another computer server, the GC found that it was irrelevant whether the e-mails (i) were still relayed to and stored on the server, which was accessible to the EC inspectors at all times, or (ii) were few and/or insignificant for the subject-matter of the investigation.  The only element of importance, according to the GC, was that the instruction to divert incoming e-mails had taken place without the EC inspectors’ knowledge. 

What Is the “Take-Away” for Companies? 

The GC’s judgments shed light on (i) the extent to which past NCA investigations into the same anticompetitive conduct may be used as a “shield” against EC dawn raids and (ii) what qualifies as a refusal to submit to an EC dawn raid as regards electronic files. 

In particular: 

  • Despite rejecting Orange’s action, the GC has arguably left a window open for companies to use past NCA investigations in the same anticompetitive conduct as a shield against the conduct of EC dawn raids.  The GC’s judgment implies that, in cases where a NCA carried out a dawn raid at the company’s premises in the past, the EC may need to at least consult the NCA’s case file prior to conducting an additional dawn raid, where the same anticompetitive conduct is investigated by the two authorities.  
  • Refusals to submit to an EC dawn raid appear to be interpreted in a particularly wide manner when it comes to electronic files.  This is owed to a concern that, by their very nature, electronic files are easier and quicker to manipulate than paper files.  The procedural fine imposed on EPH highlights the need for companies to provide for and activate clear chains of command during dawn raids, in order to ensure they will not be fined for any mishaps.  The risk for such mishaps is even more present when it comes to electronic files, given the possibility for remote access to them and the usual involvement of third-party service providers.