On 30 January 2008 the EC Commission imposed a fine of €38 million on the German energy company E.ON for breaking a seal that had been affixed by Commission officials during a dawn raid. The fine demonstrates that the Commission will not tolerate any attempts by companies to undermine its powers of investigation under the competition rules. It also highlights the need for companies to fully cooperate during a dawn raid, and to ensure that all employees are aware of the procedures to be followed during such an investigation and know what they can and can't do.
In May 2006 the EC Commission carried out a dawn raid at the premises of E.ON as part of an investigation into anti-competitive practices in the German electricity market. During the raid the officials placed a seal on an office door in order to secure documents collected during the course of that day but which they had not yet copied. When the officials came back the next day the seal was broken.
The Commission sent a statement of objections to E.ON, alleging that it had intentionally or negligently broken the official Commission seal, giving E.ON one month to reply and set out all the facts relevant to its defence. The Commission has now concluded that E.ON has not offered any credible explanations for the appearance of the 'void' signs on the seal. Although it does not conclude that the company broke the seal intentionally or that incriminating documents were removed, this could not be ruled out by the Commission. There is no requirement to prove an intentional breach; it is sufficient for it to show that the seal was broken negligently.
The Commission's power to impose fines
Under Regulation 1/2003, the competition law enforcement Regulation, the Commission can impose fines of up to 1% of the company's total turnover in the preceding business year, where a company refuses to submit to an investigation, incomplete information is supplied, incorrect or misleading answers are given or seals affixed by officials or other authorised persons have been broken.
This is the first time the Commission has imposed a fine for breach of a seal and that a fine has been imposed by way of a separate decision. In previous cases of failure to cooperate and of obstruction during a dawn raid, the Commission has taken this into account when calculating the fine imposed on the company for breach of substantive law. In the recent video tapes cartel for example, the fine imposed on Sony was increased by 30% for failure to cooperate during the investigation. A Sony employee was found by the Commission to have shredded documents during the investigation, and another employee refused to answer oral questions asked by the Commission's inspectors.