In October 2012 the Spanish Supreme Court published its judgment of 27 April 2012 in the “STANPA” case. STANPA is the national association of manufacturers of cosmetic and perfumery products.
The Supreme Court quashed the judgment of the National Appeal Court (Audiencia Nacional), which established that the Spanish Competition Commission (CNC) had violated STANPA’s constitutional right to the inviolability of its domicile when it carried out unannounced dawn raids copying in their entirety several hard disks of certain STANPA employees. This was considered to infringe the principle of proportionality and, therefore, the above-mentioned constitutional right. The National Appeal Court stated that the CNC had not limited itself to the subject matter of the inspection as set out in the administrative order and judicial authorization and consequently, the CNC should return to STANPA all documents compiled during the inspection unrelated to the subject matter of the dawn raid i.e. the professional hairdressing sector.
Supreme Court Judgment
The Supreme Court has now confirmed that the CNC’s imaging of entire hard disks did not violate STANPA’s rights.
The Court held that the findings of the National Appeal Court did not follow the Court of Justice of the European Union (CJEU) ruling in Dow Chemical of 1989. However, while the CJEU said in Dow Chemical that competition authorities cannot be limited when pursuing an inspection to request only documents which are precisely identified, it also stressed the need to establish clearly the subject matter and aim of each dawn raid in order for the company to be able to understand the scope of its duty to co-operate with the inspection. The problem is that if a competition authority copies entire hard disks, the above case law appears to be automatically infringed as the inspectors are not limited by the subject matter of the inspection or any other factor, if all documents available in the company premises are indiscriminately copied.
In order to annul the judgment of the National Appeal Court, the Supreme Court also referred to the CJEU judgment of AM&S of 1982, related to the legal privilege attached to certain documents drafted by external lawyers. In this regard, the Court confirmed the National Appeal Court’s finding that the CNC had not infringed STANPA’s right to protect documents prepared by its external lawyer as privileged as it had not indicated during the inspection which particular documents should be protected and why. However, in addition, the Court also applied this reasoning to establish that companies have the duty to indicate, without revealing their content, the privileged elements of each document to allow the inspectors to verify whether they comply with the conditions justifying legal protection. The Supreme Court thus extends the AM&S case law to any type of document, not only those protected by legal privilege.
Unfortunately, the Court overlooks a very important factor in this ruling; namely that STANPA could not have provided details in relation to each document to be inspected, due to the very fact that the CNC copied the entire hard disks of the relevant employees of the Trade Association