In its interim judgment of 5 September 2012 (LJN: BX6988), the President of the Rotterdam District Court suspended the periodic penalty payments imposed by the Netherlands Authority of the Financial Markets ("AFM") on three investment companies. The reason for the suspension is that according to the President, the AFM failed to state the reasons as to why a very broad request for information is necessary to establish an infringement or the scope of an infringement. As the same provisions of the General Administrative Law Act apply to company visits conducted by the Dutch Competition Authority ("NMa"), this judgment is also relevant in the context of competition law investigations.
In its judgment, the President considered that if a regulator demands access to a full email system, it should explain the reasons as to why this access is necessary in order to establish an infringement or the scope of an infringement. Unfortunately, the judge failed to elaborate on what such explanation should consist of. In addition, it does not become clear whether this duty to provide reasons also extends to more limited requests for information, for example to requests to access one specific email account, or to access the results of a search on the basis of specific key words. In an earlier case, the District Court Rotterdam ruled that a regulator should enable an alleged infringer to monitor that a regulator does not search documents outside the scope of an investigation (Fortis-Allianz, LJN: BH2647). This exercise would be made slightly easier for a company if a regulator is required to explain the reasons as to why certain documents are relevant in order to establish an infringement.
The President also ruled that the regulator in this case had an extended duty to state the reasons as to why it was necessary to obtain access to documents of specific employees considering the fact that a criminal investigation was already pending against these employees. The judge observes the risk of détournement de pouvoir. The President stresses that the AFM should not use its competences in order to assist the public prosecution office in a pending criminal investigation.
This raises the question whether a similar risk could arise in competition law cases. The answer to this question is probably negative. Article 91 of the Dutch Competition Act only allows the NMa to provide information on ongoing investigations to administrative bodies that are responsible for the enforcement of competition law provisions. The inverse situation is more likely: the NMa has in the past started investigations on the basis of evidence acquired from wiretaps of the public prosecution office.
Finally, the President also found that neither the duty to grant access nor the duty to provide information nor the duty to provide assistance as laid down in the General Administrative Law Act requires alleged infringers to send their full digital administration to a regulator. In order to obtain information, a regulator may only ask written or oral questions or make copies of relevant documents during a company visit. In practice the effect of this judgment may be limited as the regulator might be able to use a different avenue to come to the same result, namely the acquisition of documents. A regulator can for example visit a company to copy documents or it can threaten to conduct such a visit.