EC welcomes General Court judgment confirming its inspection powers in the area of electronic searches
27 Nov 2014 12:10 PM
The European Commission welcomes the judgment of the EU General Court (case T-272/12), dismissing an appeal by Energetický a průmyslový holding (EPH) and its subsidiary EP Investment Advisors (EPIA) against a €2.5 million fine the Commission imposed on them in 2012. EPH and EPIA were fined for obstructing a Commission inspection in an antitrust investigation, by failing to block an email account and diverting incoming emails. The judgment sends a clear message to companies that any steps that undermine the integrity and effectiveness of inspections, including tampering with data stored electronically, are illegal and will be sanctioned.
The Court confirmed that the Commission was right to consider both the failure to block an e-mail account and the diversion of incoming emails as serious breaches of EPH and EPIA's obligation to cooperate with the Commission during the inspection. In line with previous case law (cases T-141/08and C-89/11P), the Court held that these two incidents constitute an obstruction in themselves; the Commission does not need to show that any document was actually removed or manipulated.
The Commission welcomes the Court's findings, because obstructions of inspections can severely undermine competition enforcement. The judgment makes clear that the Commission is entitled to impose appropriate and deterrent sanctions for companies' conduct that may result in destroying evidence of antitrust infringements, irrespective of whether it is stored in paper or electronic form.
Inspections are one of the Commission's most important investigative tools to detect infringements of EU antitrust rules. Commission inspectors may examine and take copies of documents related to the business, irrespective of the form in which they are stored. Business documents are nowadays largely stored in electronic files. In order to avoid any destruction of electronic files, inspectors routinely take steps ensuring them access to the complete files during an inspection.
In particular inspectors identify the e-mail accounts of key persons in a company under inspection and block access to these e-mail accounts during the inspection as one of the measures to prevent the destruction of content. The Commission needs to review not only emails that pre-date the inspection but also emails that are exchanged in the course of the inspection.
Article 23(1)(c) of the antitrust Regulation 1/2003 provides that the Commission can impose a fine of up to 1% of a company's total turnover if the company, intentionally or negligently, produces the required books or other records related to the business in incomplete form during an inspection or refuses to submit to an inspection.
This is not the first time the Commission has sanctioned a company under antitrust Regulation 1/2003 for obstructing inspections. In 2008, the Commission fined E.ON €38 million for the breach of a seal during an inspection. The Commission's decision was confirmed by the General Court in 2010and subsequently by the Court of Justice in 2012.
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