Companies should be aware that the Dutch competition authority (ACM) will not only examine electronic records and emails, but can also check WhatsApp messages during dawn raids. The ACM recently imposed a fine of EUR 1.84 million on a company for non-cooperation with a dawn raid; its highest fine so far for non-cooperation. Several of the company’s employees had left WhatsApp groups and deleted chats before handing over their mobile phones for inspection.
The ACM considered this destruction of potential evidence a highly serious infringement, but granted a 20% fine reduction on the basis of the company’s far-reaching cooperation with the investigation. Companies should double-check their employee dawn raid instructions to ensure specific guidelines are included covering how to handle mobile phones during inspections.
During dawn raids, the ACM can inspect a company’s business documents and records, including – as clarified in an earlier ruling – data available on the employees’ mobile phones [see our January 2018 Newsletter]. The company bears a duty to cooperate with the dawn raid; this ensures that the ACM can effectively enforce its inspection powers. According to the ACM, the company must ensure that its employees adhere to this duty.
In 2018, a number of ACM officials arrived at the premises of an unnamed company. They informed the company’s representative of the subject matter of the dawn raid, and reminded the company of its duty to cooperate with the inspection. The ACM officials subsequently demanded two of the company’s employees to switch their business phones to “airplane mode” before handing them over for inspection. Before doing so, one of the employees left several internal WhatsApp groups. During the course of the dawn raid, more employees left WhatsApp groups and deleted chat conversations. As soon as the company’s lawyer and representative discovered this, ACM officials were informed and the relevant employees were instructed to refrain from deleting any further chats. The company subsequently provided the ACM with an overview of deleted and exited WhatsApp groups and chats, the subject matter of the various chats, and lists of participants. However, part of the information could not be recovered.
According to the ACM, the company’s employees had obstructed the ACM in carrying out its investigation into a potential cartel infringement by destroying potential evidence. As a result, the company had not complied with its duty to cooperate, and as such received a EUR 1.84 million fine. However, the company obtained a 20% fine reduction for effective cooperation, based on reasoning similar to that stated in the ACM’s guidelines for simplified resolution of cases involving a fine. According to the ACM, the company had cooperated beyond its legal obligation to do so by:
- providing additional, self-incriminating, evidence;
- not contesting the facts and the legal qualification as laid down in the ACM’s fining decision;
- agreeing to a simplified procedure without involving the ACM’s Legal Department, and
- accepting the calculation method and level of the fine.
The EUR 1.84 million fine clearly shows how seriously the ACM is taking companies’ non-cooperation with its investigations. Companies should double-check their dawn raid instructions and ensure that specific guidelines are in place specifying how employees should handle their mobile phones during dawn raids. Failing to specifically address employees’ mobile phone etiquette may cost you dearly.
This article was published in the Competition Newsletter of January 2020.