On 18 March 2013, the European Commission (the “Commission”) issued revised guidance on the conduct of inspections at business premises of undertakings suspected of anticompetitive behaviour. The guidance interprets the scope of the Commission’s powers of inspection as laid down in Article 20 of Council Regulation 1/2003 and revises them in recognition of a rapidly evolving ‘e-work’ environment. The revised guidance follows a series of recent cases relating to breach of dawn raid procedures, some of which are discussed below.
On 28 March 2012, the Commission imposed fines totalling €2.5 million on two Czech energy companies for obstructing an inspection carried out by Commission officials at their premises as part of an antitrust investigation. The companies failed to block an email account and diverted incoming emails, in breach of their obligations to cooperate with Commission officials during such inspections and to disclose all documents relevant to the investigation.
The revised guidance codifies this decision stating that an undertaking may be required to provide staff to assist the Commission officials with, among other things, temporarily blocking email accounts, temporarily disconnecting running computers from the network, removing and re-installing hard drives from computers and providing support through ’administrator access rights’. The guidance expressly states that, once such action is taken, the undertaking must not in any way interfere with these measures.
Furthermore, in November 2012 the Court of Justice of the European Union (the “ECJ”) in the E.ON Energie case, gave its full support to the imposition, by the Commission, of appropriate and deterrent sanctions on companies which attempt to destroy evidence in order to escape fines for antitrust infringements. In that case, E.ON could not explain why certain sealed records had been broken and, as a result, were handed a €38 million fine. The revised guidance now confirms that it is the undertaking's responsibility to ensure that any seals which have been affixed to a business premises, books or records are not broken until they have been removed by inspectors.
While the guidance mostly codifies recent Court and Commission decisions it also elaborates on some of the advanced methods and tools the Commission intends to utilise when extracting data in electronic form. Some notable additions are as follows:
- The guidelines provide a broader list of the potential types of storage media that may be accessed including laptops, desktops, tablets, mobile phones, CD-ROMs, DVDs and USB Keys.
- It makes it clear that inspectors may not only use built in keyword search tools for their IT searches, but also their own dedicated software/hardware. In practice, this means the inspectors will copy data from the company’s hard drive and place a copy on a PC brought by the inspectors. They will then run searches on the copied data using their own software.
- It also authorises the Commission to remove any hardware from the business premises and continue its review elsewhere in the presence of the company and its advisers. This power was recently challenged in the Nexan/Pyrsmian appeal, but the General Court refused to rule on this point at a preliminary stage.
In an era where company information is increasingly stored electronically in systems which can be quickly modified or deleted, these revised guidelines send a clear message to all companies that the Commission will not tolerate actions which could undermine the integrity and effectiveness of their investigations by tampering with such information during an inspection.
Accordingly, companies are strongly advised to take stock of these developments in connection with their own antitrust compliance and readiness for dawn raids. They should ensure that staff, especially IT staff, have been trained on dawn raid best practice. As can be seen from the above cases, inappropriate actions by IT and other staff can be very costly.