The European Court of Human Rights has ruled that a dawn raid conducted by the Czech Competition Authority violated the right to respect for private and family life, home and correspondence, because it was not subject to prior judicial authorisation and there was no effective post-inspection court review in place. The ruling serves as a reminder for companies to check whether sufficient procedural guarantees are available in respect of dawn raids carried out by competition authorities.
In November 2003, the Czech Competition Authority conducted a dawn raid at Delta Pekárny, a bakery that was suspected of participating in a cartel in the bakery sector. Following the dawn raid, the inspection officials imposed a fine on Delta Pekárny for refusing to allow an in-depth examination of its data. All of the appeals at the domestic courts lodged by Delta Pekárny were dismissed. It claimed, in particular, that the inspection of its premises without any judicial supervision had amounted to a breach of its rights as protected by Article 8 (right to respect for their premises) of the European Convention on Human Rights.
- it has a basis in domestic law;
- pursues a legitimate aim; and
- can be regarded as necessary for achieving that aim.
According to the ECHR, the latter condition requires that there be adequate and effective safeguards in place in national legislation, such as a prior judicial authorisation for carrying out a dawn raid, or adequate court review after the fact. A particularly rigorous review should be available in cases where dawn raids can take place without prior judicial authorisation. The ECHR observed that the Czech courts had only analysed the presence of legal basis, legitimate aim and proportionality with respect to the powers conferred to the Czech Competition Authority, but had not reviewed the actual process of the dawn raid and, accordingly, the way in which the Authority had exercised its powers. Since the Czech legislation lacked either safeguard, the ECHR concluded that Article 8 of the European Convention on Human Rights had indeed been breached.
The EU’s General Court anticipated that this might become an issue in Deutsche Bahn, by stating that the absence of prior judicial authorisation in a dawn raid by the European Commission was counterbalanced by a number of factors including the existence of ex post facto comprehensive judicial review. The European Union Courts should perform a comprehensive review of inspection decisions covering matters of both fact and law and have the power to evaluate the evidence and annul the contested decision.
In view of this new judgment it is wise for companies to check in each case whether sufficient procedural safeguards for dawn raids are in place, in particular if they are carried out by national competition authorities.