Antitrust dawn-raid upsurge: An old visitor at your doorstep
POWERED BY ZEPOS & YANNOPOULOS
After a year-and-a-half hiatus, the investigative activities of the European Commission and national competition authorities are steadily picking up, in an effort to clear the backlog of pending inspections that built up during the Covid-19-induced lockdowns since March 2020. A prime example is the recent flurry of unannounced inspections (“dawn raids”) by the Hellenic Competition Commission (HCC) at the premises of several companies active in multiple sectors (including pharmaceuticals, energy, retail trade of supermarket products, information technology, catering services etc). In light of this trend, now is as good a time as any for businesses to revisit their internal dawn raid policies, to ensure that sufficient and up-to-date processes are in place to address the new challenges stemming from current developments in inspection practices and the new corporate reality (paperless policies, teleworking etc.).
An important issue that companies should be aware of, and be prepared to address effectively, is the eventuality of being served with unclear and/or broadly worded inspection orders, which do not identify, in a clear and precise manner, the sectors of activity and/or the type of conduct which the company is being investigated for. According to settled EU case law, a competition authority must have reasonable grounds for suspecting an infringement of EU competition rules to justify conducting a dawn raid. The inspection order can therefore only validly refer to specific sectors of activity and types of conduct (e.g. anti-competitive agreements and/or abuse of dominant market position) in relation to which the competition authority has sufficient grounds for suspecting a violation. Broadly phrased inspection orders could (and should), therefore, cause concern, as these may constitute a potential indication that the authority lacks reasonable grounds for suspecting a competition law infringement touching upon all the different activities that may fall under the inspection order’s phrasing. Businesses should therefore be vigilant on this point during dawn raids, and ready to defend themselves against inspections with an excessive scope, which could even amount to “fishing expeditions”, i.e. indeterminate searches to “fish” information relating to potential anti-competitive conduct, about which the authority did not have any reasonable grounds of suspicion beforehand.
Companies should also be aware that competition authorities are embracing the use of new technologies, in an effort to enhance and make more efficient their investigative powers. Adapting to new corporate practices, such as paperless policies and teleworking, inspections are now mostly focused on accessing all sorts of e-devices and obtaining copies of electronic files and emails. Inspectors can also take en bloc copies of PST (email) files from specific employees (i.e. copies of entire mailboxes) for a so called continued inspection. In order to manage the often voluminous material copied from the company’s database, competition authorities are deploying forensic tools, allowing them to narrow down their search to specific materials with the use of keywords. The fact that a good part of the workforce is nowadays working remotely has also not been an issue: with the use of remote access software, investigators are able to access data from employees teleworking, or even working at company premises other than the ones being raided.
New challenges notwithstanding, companies should not neglect that full co-operation with a competition authority carrying out an inspection is, as ever, of paramount importance, to avoid any allegations of obstructing the authority’s investigation, mindful of the fact that hefty fines and sanctions can be imposed on companies and individuals (including criminal penalties for the latter) for such obstructive conduct. Having said that, being cooperative does not undermine the full exercise of rights of defence, when and where necessary.
