Dawn raid preparation

In Symrise v Commission the General Court confirmed that the Commission does not need to prove, or even provisionally establish, the existence of an infringement before ordering an inspection.

It is sufficient that the Commission possesses sufficiently serious indications of a potential infringement. The court confirmed that the Commission may rely on information gathered from different sources over time, including information obtained during earlier investigative activities.

For businesses the message is straightforward: challenges to inspection decision remain difficult. When inspectors arrive, the priority should be managing the process carefully, protecting legal privilege and ensuring that the inspection remains within its authorised scope.

In practice:

Make sure your first-hour protocol covers three things straightaway: (1) a designated contact person who manages the inspection on the company's behalf, (2) immediate involvement of (external) legal counsel before inspectors are granted access, and (3) a fixed process to check the order against its scope before any documents are released.

While courts generally grant authorities significant latitude, inspection decision must still be properly justified. Not just on substance, but also with regard to the period involved.

In Michelin v Commission the General Court partially annulled an inspection decision because the Commission had not demonstrated sufficiently serious indications for the entire period covered by the inspection. Authorities must define the subject matter, scope and timeframe of an inspection with adequate precision. At the same time, the Court did accept that publicly available material may form part of the indications for the inspection decision.

In other words, while challenges to inspection decisions as such remain difficult, careful review of the scope at the start remains important, as this could have a significant impact on the investigation and any subsequent legal challenges.

In practice

As soon as you receive the inspection decision, ask for a written description of the subject matter, period and markets covered, and record which documents and search terms fall outside that scope. This creates the basis for any later challenge.

In Red Bull and Others v Commission the General Court confirmed that a detailed complaint from a competitor may provide a sufficient basis for an inspection decision, particularly when supported by additional information. The judgment serves as a reminder not only for companies facing investigations, but also for businesses considering whether potentially anti-competitive conduct by competitors should be brought to the attention of competition authorities. A well-substantiated complaint can lead to enforcement action.

In addition, the General Court made clear that the legality of an inspection decision is assessed on the basis of the information available to the Commission when the decision is adopted. Concerns about how the inspection is conducted generally need to be raised separately. Businesses will do well to keep a detailed record of events, objections and procedural issues throughout the inspection process.

In practice

Keep a running log during the inspection of every step, request and objection, noting the time and the name of the inspector involved. This is essential evidence if you later want to challenge how the inspection was conducted.

The Nuctech litigation under the Foreign Subsidies Regulation further illustrates that investigations are not limited to traditional competition enforcement. Additionally, it showcases that digital evidence, even if stored abroad, is becoming increasingly important.

In this particular case, Nuctech, a Chinese security equipment manufacturer, was subject to an inspection at its EU subsidiaries in connection with a review of foreign subsidies. During the inspection, the Commission sought access to business data stored on servers in China. Nuctech applied to the General Court for interim measures to halt the inspection. In August 2024, the General Court rejected that request, signalling that requests for access to relevant business data cannot easily be rejected merely because that data is stored outside the EU. While businesses are at liberty to choose the physical location of their servers, any use of employees carrying out daily business within the European Union means they have voluntarily subjected themselves to the applicability of EU law. Laws of third states or practical difficulties, therefore, cannot in general preclude any inspection powers of the Commission.

In practice

The implications of this signal extend well beyond foreign subsidy investigations. Businesses should ensure that their dawn raid protocols address cloud-based systems, cross-border data access and escalation procedures involving both legal and IT teams.

The most recent development comes from the Grand Chamber ruling in IMI and Others v Autoridade da Concorrência. The Court confirmed that business emails exchanged through a company messaging system constitute communications that are protected under the respect of private life and communications as laid down in Article 7 of the European Charter of Fundamental Rights. This protection exists regardless of whether company policies limit the use of the messaging system to professional purposes.

At the same time, the Court confirmed that competition authorities may seize such emails during inspections without prior judicial authorisation, in so far as they relate to the subject of the investigation and provided that adequate safeguards exist, including effective judicial review after the inspection. A distinction with messages on personal devices remains. When authorities seek access to mobile phones, laptops or other devices belonging to an employee (but also used professionally) and this carries the risk of serious interference with the fundamental rights of the employee, that access must be subject to a prior review carried out either by a court or by an independent administrative body.

In practice

Have your protocol distinguish upfront between purely business systems and personal devices, so staff on site immediately know which regime applies.