Do's and don'ts in the event of a dawn raid
Last week, the Dutch Authority for Consumers and Markets (the “ACM”) imposed a fine of EUR 1.84 million on a company for obstructing an investigation during a dawn raid. In this blog, we will discuss that case and other matters relating to this subject.
The ACM – fine for possible destruction of evidence
The company’s employees obstructed the investigation because they left WhatsApp groups and deleted chats. They did so during an ACM dawn raid in 2018 – that is forbidden. The ACM may raid companies unannounced if there is a suspicion of a violation of the Dutch Competition Act and/or of the Treaty on the Functioning of the European Union. In this case the suspicion was that cartel agreements had been concluded. Companies are obliged to cooperate with the ACM investigation and may not destroy any evidence (such as WhatsApp chats). Chats may contain evidence to establish the infringement. The ACM consequently imposed a EUR 1.84 million fine on the company. The fine included a 20% reduction.
The European Commission – obstructing during a dawn raid
Just like the ACM, the European Commission always critically examines any obstruction of an investigation. For example, the European Commission investigated the Slovak train operator ZSSK for the removal of data from a laptop. Fortunately for ZSSK, the investigation fizzled out and the European Commission closed the proceedings without imposing a fine. This probably has to do with the fact that ZSSK had only installed a new operating system on the laptop and had not intentionally removed information. A somewhat older but still relevant example is that of a Czech energy company. During a dawn raid in 2009, the European Commission ordered the company to block e-mail accounts but later discovered that the company had changed a password for one account, allowing not only the European Commission staff but also company employees to still access the accounts. Furthermore, the company had redirected incoming e-mails to a different server, so that those e-mails were not visible for the Commission. The result was a EUR 2.5 million fine, which was confirmed on appeal.
Prevention is better than cure
When the regulator is at your doorstep, people can suddenly do unexpected things, such as destroying potential evidence. Therefore, be prepared and train receptionists and other employees who may be involved. In any case, inform them of the most important do’s and don’ts during a dawn raid. The recent ACM case and previous cases show that effective preparation can prevent a lot of problems. Competition authorities can almost always find out whether data has been deleted or altered, and will not hesitate to take enforcement action if that is the case.
Please do not hesitate to contact us if you would like more information on what to do or not to do during a dawn raid by the European Commission or another competition authority.