European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Undertakings may face fines not exceeding 1% of the total turnover in the preceding business year where, intentionally or negligently, they fail to comply with their obligations regarding the inspection (Regulation No 1/2003, Article 23). Such is the case where they produce the required books or other records related to the business in incomplete form or refuse to submit to inspections ordered by  …

Penalties

Article 20 of Regulation No 1/2003 authorizes the Commission to “conduct all necessary inspections of undertakings and associations of undertakings”. Empowered agents conduct the inspection by means of an authorization or a decision and are assisted by officials of the competition authority of the Member State in whose territory the inspection is to be conducted. Pursuant to Article 22(2) of the same regulation, the Commission may request the competent authorities of the Member States to undertake on their territory the inspections it considers to be appropriate or it has ordered by decision.

The Commission may freely choose between conducting an investigation by authorization and/or by a decision, depending solely on the needs of the inquiry . The EU authority is not required to conduct an inspection by mere authorization before resorting to an inspection by decision. This solution is justified by the objective of the inspection, which is to enable the Commission to gather the necessary documentation to ascertain the actual existence and scope of a given factual and legal situation. The Commission's new discretionary power does not only extend to the choice of the form of inspection. It may also conduct a “surprise” inspection or dawn raid without warning the undertakings concerned . It thus takes a decision requiring the undertaking or association of undertakings to submit to the investigation. The Commission's option of initiating a surprise inspection is not prevented by the existence of a decision by a national court concerning the agreement or the practice at issue, even if the decision contemplated by it conflicts with that national court's decision .

Case 136/79 National Panasonic v Commission [1980] ECR 2033, LawLex200500004051JBJ; Case 46/87 Hoechst v Commission [1989] ECR 2859, LawLex200500005405JBJ; Case T-289/11 Deutsche Bahn AG, Judgment of 6 September 2013, LawLex201500000569JBJ: the choice made by the Commission between an inspection by straightforward authorisation and an inspection ordered by a decision does not depend on the particular seriousness of the situation but by the special features of the case.; Case T-402/13 Orange Judgment of 25 November 2014, LawLex201500000568JBJ.

i.e. in order to avoid the destruction or disappearance of any evidence: Case 136/79 National Panasonic v Commission [1980] ECR 2033, LawLex200500004051JBJ.

Case T-325/16 Ceské dráhy, a.s., Judgment of 20 June 2018, LawLex201800001736JBJ.

Conditions

An inspection may be conducted upon production of a simple authorization (Regulation No 1/2003, Article 20(3)). The authorization must be written and must specify the subject-matter and purpose of the inspection and the penalties provided for in case the undertaking concerned fails to cooperate . That authorization must be produced by authorized officials . The Commission must inform the competent authority of the Member State in whose territory the inspection is to be conducted “in good time” before the inspection, of the mission of the investigation (subject-matter and purpose) and also of the identity of the authorized officials.

Although undertakings are not required to submit to an inspection by authorization, pursuant to Article 20(3), they must, where they agree to the inspection, provide complete information  and answers must not be incorrect or misleading on penalty of sanctions . The obligation to submit complete documents required by the Commission's officials must be understood to mean not merely a possibility of having access to all of them but also an obligation of actual submission of the specific documents required. The Commission in fact has sole discretion to decide whether a document is relevant. Undertakings subject to an inspection are not entitled to assess whether a request for documents is justified or appropriate, or to claim the confidentiality of such documents to escape the application of this obligation . Generally putting all the files in the archives of the undertaking concerned at the inspectors' disposal is not sufficient to fulfill that obligation . Furthermore, where the undertaking, has been previously informed about the inspection and has voluntarily submitted, it cannot justify an incomplete submission by claiming the lack of knowledge on the part of its representative since it is the undertaking's own responsibility to designate such representative .

See Commission Decision No 80/334/EEC of 20 December 1979, Fabbrica Pisana, LawLex200400002415JBJ; No 82/756/EEC of 27 October 1982, Fine on the Fédération Nationale de l'Industrie de la Chaussure de France, LawLex200500004108JBJ.

Commission Decision No 82/756/EEC of 27 October 1982, Fine on the Fédération Nationale de l'Industrie de la Chaussure de France, LawLex200500004108JBJ.

See in particular, Commission Decision No 82/756/EEC of 27 October 1982, Fine on the Fédération Nationale de l'Industrie de la Chaussure de France, LawLex200500004108JBJ.

Regulation No 1/2003, Article 23: 1% of the total turnover in the preceding business year.

Commission Decision No 82/756/EEC of 27 October 1982, Fine on the Fédération Nationale de l'Industrie de la Chaussure de France, LawLex200500004108JBJ. Commission Decision No 80/334/EEC of 20 December 1979, Fabbrica Pisana, LawLex200400002415JBJ.

Commission Decision No 80/334/EEC of 20 December 1974, Fabbrica Pisana, LawLex200400002415JBJ.

Inspection upon production of an authorization

Authorized officials may conduct an inspection ordered by formal decision . The Commission may adopt a decision as soon as it has solid factual information and evidence providing grounds for suspecting the existence of an infringement . The documents brought to the attention of the Commission do not have to be such as to establish beyond reasonable doubt the existence of the infringement identified in the final decision, but are only required to be capable of creating an initial suspicion of anticompetitive conduct . Likewise, where there are reasonable grounds to give rise to a suspicion of an infringement of the competition rules, the Commission cannot be required to assess all the evidence pointing in the opposite direction . The General Court has defined the criteria for determining whether the evidence available to the Commission is based on sufficiently reasonable grounds . According to the Court, there are reasonable grounds to suspect an infringement, even if they do not originate directly from the undertakings in question and even if they may be subject to differing interpretations. The fact that the inspection did not produce sufficient evidence to establish a claim does not mean that the inspection decision was not based on reasonable grounds. However, unlike the General Court, the Court of Justice has ruled that evidence gathered during unrecorded interviews is not sufficiently serious to justify an inspection decision . The absence of sufficiently strong evidence on which to base an inspection decision is sanctioned by its annulment for infringement of the right to inviolability of the home .

Decisions are generally adopted pursuant to the system of delegation of authority . This system is compatible with the principle of collegiate responsibility which governs the functioning of the Commission since decisions adopted under a delegation of authority are adopted in the name of the Commission, which is fully responsible for them, and where the system is limited to measures of management or administration. The Commission decides to conduct the inspection after consulting the competition authority of the Member State in whose territory the inspection is to be conducted. This consultation may be informal, in particular in case of dawn raids .

The inspection decision must specify the subject-matter and purpose of the inspection, appoint the date on which it is to begin  and indicate the penalties incurred by undertakings for failing to cooperate and the right to have the decision reviewed by the Court of Justice. It does not have to include specific precautionary measures relating to the consultation of correspondence between the undertaking and its lawyers, since confidentiality is required of Commission officials regardless of the scope of their mandate . Even if the decision must clearly indicate the presumed infringements which it intends to investigate , it does not have to indicate the elements on which the Commission will rely , or include a precise definition of the market and the exact legal nature of infringements . The decision may state reasons in very general terms when it has stated the infringement to be investigated and the elements to which the inspection will pertain . The Commission is also not required to disclose the type of information in its possession or the identity of the informants in the inspection decision . The Commission is not bound by a reinforced obligation to state the reasons for its inspection decision when, on the date of its adoption, it possessed information previously obtained by a national competition authority on the basis of its national law . Nevertheless, the reasons on which the decision to authorize inspections is based must remain sufficiently precise in order to avoid accusations of “fishing expeditions”, the process of carrying out indeterminate searches in order to obtain, as the case may be, information relating to conduct which the Commission does not have at its disposal. The General Court has recently modified its position in respect of fishing expeditions. After establishing the principle that “the Commission's powers of inspection would be of no use if it had to limit itself to requesting the production of documents that it was able to  identify exactly in advance”, which implies that it may search for “various items of information which are not already known or fully identified”, the European court first declared that “when the Commission carries out an inspection at the premises of an undertaking under Article 20(4) of Regulation No 1/2003, it is required to restrict its searches to the activities of that undertaking relating to the sectors indicated in the decision ordering the inspection”. It then went on to annul the inspection decisions which concerned a much wider market than the one for which the Commission had serious evidence of an infringement . 

The General Court was subsequently more indulgent, accepting that the Commission could decide to carry out new inspections in order to obtain copies of documents it had incidentally become aware of during searches not related to the object of the initial inspection  or enabling it to better define the scope of the infringement or to determine its duration even if it already has some indicia, or indeed proof, of the existence of an infringement . It now even considers that the fact that an inspection decision covers a very large part, or even almost all, of the activities of the undertakings inspected at the pan-European level, or uses the adverb “notably”, does not affect the requirement to delimit the sectors concerned .

However, the Court of Justice considers that as it is under no obligation to define precisely the relevant market, the aim of the inspection being specifically to gather evidence relating to a suspected infringement, the Commission does not breach the rights of the defense by not precisely indicating the geographical scope of the infringement or the types of conduct suspected . Lastly, the terms of a decision ordering an inspection must not exceed the scope of the infringement which may be suspected on the basis of evidence at the Commission's disposal, under penalty of annulment of said decision .

When an inspection decision has been correctly notified to an authorized person within the undertaking, the Commission must be able to carry out investigations, without being under an obligation to inform each person concerned of his duties in the circumstances of the case .The undertakings concerned by the inspection are required to submit to the investigations  and their actions must not jeopardize the effectiveness of the inspection. Such is the case where the undertaking makes incorrect statements as to where its director's office is located  or does not allow the inspectors to have exclusive access to the e-mail accounts requested without it being necessary for the Commission to prove that those data were manipulated or deleted or where the person concerned was personally aware of the measure . An undertaking refusing to submit to an inspection ordered by decision, even temporarily, may result in the imposition of a fine . An infringement is characterized as a procedural infringement even if the Commission has not subsequently taken action against the undertaking for a breach of substantive law . The fact that an association of undertakings includes members that are not based in a Member State of the EU does not relieve it from the obligation to submit to an inspection insofar as its activities relate to business going to, or coming from the EU territory .

The Commission has published an explanatory note detailing the scope and limits of the powers of investigation of authorized officials, and the rights and obligations of the undertakings concerned. It particularly stresses the obligation of undertakings to submit to an inspection ordered by decision and the obligation for investigators to hand them a certified copy of the decision .

Finally, the action for annulment against the inspection decision cannot be based on possible irregularities during the course of inspections , which can only be examined in the context of an appeal against the final decision .

Case T-521/09 Alstom Grid, Judgment of 27 November 2014, LawLex201700000994JBJ; Case T-325/16 Ceské dráhy a.s. c, Judgment of 20 June 2018, LawLex201800001736JBJ.

Case T-274/15 Alcogroup and Alcodis, Judgment of 10 April 2018, not available in English; upheld by Case C-403/18 P Alcogroup and Alcodis, Judgment of 17 October 2019, not available in English.

Case 85/87 Dow Benelux NV v Commission, [1989] ECR 3137, LawLex200500004565JBJ.

Case T-325/16 Ceské dráhy a.s. c, Judgment of 20 June 2018, LawLex201800001736JBJ; Case T-249/17 Casino, Guichard-Perrachon et Achats Marchandises Casino SAS (AMC), LawLex202100004872JBJ; Case T-254/17 Intermarché Casino Achats and Case T-255/17 Les Mousquetaires et ITM Entreprises, 3 Judgments of 5 October 2020, not available in English.

See Case 136/79 National Panasonic v Commission [1980] ECR 2033, LawLex200500004051JBJ; Case 46/87 Hoechst v Commission [1989] ECR 2859, LawLex200500005405JBJ; Case T-23/09 Conseil national de l'Ordre des pharmaciens, Judgment of 26 October 2010, LawLex201200001967JBJ.; see also Case C-538/18 P and C-539/18 P Ceské dráhy a.s., Judgment of 30 January 2020, not available in English, clarifying that the Commission is also not required to include the appreciable nature of the effect on trade between Member States. 

See Case 97/87 Dow Chemical Ibérica and others v Commission [1989] ECR 3165, LawLex200500004570JBJ; Case 85/87 Dow Benelux NV v Commission, [1989] ECR 3137, LawLex200500004565JBJ.

Case T-254/17 Intermarché Casino Achats and Case T-255/17 Les Mousquetaires et ITM Entreprises, 3 Judgments of 5 October 2020, not available in English.

Case C-538/18 P and C-539/18 P Ceské dráhy a.s., Judgment of 30 January 2020, cited above.

Case T-135/09 Nexans France SAS, Judgment of 14 November 2012,  LawLex201200002316JBJ and Case T-140/09 Prysmian SpA, Judgment of 14 November 2012 not available in English.

Case T-289/11 Deutsche Bahn and others v Commission, Judgment of 6 September 2013, LawLex201500000569JBJ; Case  T-521/09 Alstom Grid, Judgment of 27 November 2014, not available in English; Case T-655/11 FSL Holdings, Judgment of 16 June 2015, LawLex201500000777JBJ.

Case  T-402/13 Orange, Judgment of 25 November 2014, LawLex201500000568JBJ.

Case T-251/12 EGL Inc., Judgment of 29 February 2016, LawLex201600000470JBJ; Case T-267/12 Deutsche Bahn AG, Judgment of 29 February 2016, LawLex201600000459JBJ.

Case T-255/17 Les Mousquetaires et ITM Entreprises, 3 Judgments of 5 October 2020, not available in English.

Case C-37/13 P Nexans SA, Judgment of 14 June 2014, LawLex201400002145JBJ.

Case T-325/16 Ceské dráhy a.s. c, Judgment of 20 June 2018, LawLex201800001736JBJ.

Case T-272/12 Energetický a prumyslový holding a.s., Judgment of 26 November 2014, LawLex201400001339JBJ.

See Case 46/87 Hoechst v Commission [1989] ECR 2859, LawLex200500005405JBJ; Commission Decision No 94/735/EC of 14 October 1994, Akzo Chemicals BV, LawLex200500004792JBJ.

Commission Decision No 94/735/EC of 14 October 1994, Akzo Chemicals BV, LawLex200500004792JBJ.

Case T-272/12 Energetický a prumyslový holding a.s., cited above.

Commission Decision No 92/500/EEC of 7 October 1992, CSM - Sugar, LawLex200500004816JBJ.

Commission Decision No 92/237/EEC of 6 April 1992, Ukwal, LawLex200500004656JBJ.

Case C-538/18 P and C-539/18 P Ceské dráhy a.s., Judgment of 30 January 2020, not available in English.

http://ec.europa.eu/competition/antitrust-explanatory_note.pdf

Case T-274/15 Alcogroup and Alcodis, Judgment of 10 April 2018, not available in English; upheld by Case C-403/18 P Alcogroup and Alcodis, Judgment of 17 October 2019, LawLex202000001995JBJ; Case T-325/16 Ceské dráhy a.s. c, Judgment of 20 June 2018, LawLex201800001736JBJ; Case T-249/17 Casino, Guichard-Perrachon et Achats Marchandises Casino SAS (AMC); Case T-254/17 Intermarché Casino Achats and Case T-255/17 Les Mousquetaires et ITM Entreprises, 3 Judgments of 5 October 2020, not available in English.

Case T-274/15 Alcogroup and Alcodis, Judgment of 10 April 2018, cited above.

TUE, 3 October 2020, (3 cases), Casino, Guichard-Perrachon and Achats Marchandises Casino SAS (AMC), Case T-249/17, LawLex202100004872JBJ; Intermarché Casino Achats, Case T-254/17 not available in English; Les Mousquetaires and ITM Entreprises, Case T-255/17, not available in English.

CJUE, 9 March 2023, Les Mousquetaires SAS, Case C-682/20 P, LawLex202400005919JBJ; Casino, Case C-690/20 P, LawLex202400005920JBJ and Intermarché Casino Achats SARL, Case C-693/20 P, LawLex202400005921JBJ, censuring the General Court's judgments on this point.

See Case 5/85 AKZO Chemie v Commission [1986] ECR 2585, LawLex200500004444JBJ; Case 46/87 Hoechst v Commission [1989] ECR 2859, LawLex200500005405JBJ.

Case 5/85 AKZO Chemie v Commission [1986] ECR 2585, LawLex200500004444JBJ: the consultation may take place by telephone and without minutes being drawn up.

...but not necessarily the end date: Cases T-254/17 Intermarché Casino Achats and T-255/17 Les Mousquetaires et ITM Entreprises, Judgments of 5 October 2020, not available in English.

Inspections by decision

Article 21 of Regulation No 1/2003 authorizes the search for evidence in all premises where the Commission suspects that books or other business records related to the subject-matter of the inspection, which may be relevant to prove a serious infringement, are being kept . In such a case, the inspection may take place in all premises, land and means of transport where those documents are being kept, including the homes of directors, managers and other members of staff of the undertakings and associations of undertakings concerned. The inspection must be by way of formal decision, which must state the reasons for it. It must specify the subject-matter and purpose of the inspection, in particular by stating the reasons that have led the Commission to suspect that a serious infringement exists. The decision must also set out the start date of inspections and mention the right for undertakings to have the decision reviewed by the General Court. The Commission must first consult the competition authority of the Member State in whose territory the inspection is to be conducted. Furthermore, the decision cannot be executed without prior authorization from the national judicial authority according to the same terms and conditions as the inspection ordered by decision.

See previous case law: Case T-56/99 Marlines v Commission [2003] ECR II-5225, LawLex200500004838JBJ.

Inspection of other premises

Undertakings may face fines not exceeding 1% of the total turnover in the preceding business year where, intentionally or negligently, they fail to comply with their obligations regarding the inspection (Regulation No 1/2003, Article 23). Such is the case where they produce the required books or other records related to the business in incomplete form or refuse to submit to inspections ordered by a decision, e.g., by refusing to grant the Commission's inspectors access to its building before its lawyers arrive . Thus, the temporary refusal by lawyers to grant the investigating officers access to the office of one of the  company's directors is sufficient for the applicant to be considered to have refused to submit totally to the investigation decision, without there being any requirement for the Commission to show that the delay caused by that refusal may have led to the destruction or concealment of documents . This is also the case where they supply incorrect or misleading answer in response to a request for oral explanations, they fail to rectify that answer within the required time-limit, or they fail or refuse to provide a complete answer on facts relating to the subject-matter and purpose of an inspection ordered by a decision. Lastly the same goes where they break the seals affixed by the Commission's officials .

The Commission may further impose on an undertaking periodic penalty payments not exceeding 5% of the average daily turnover in the preceding business year per day in order to compel it to submit to an inspection (Regulation No 1/2003, Article 24 (1) (e)).

Case T-357/06 Koninklijke Wegenbouw Stevin BV, Judgment of 27 September 2012, LawLex201700001055JBJ. 

Commission Decision No 39.326 of 30 January 2008, E.ON Energie AG, LawLex201000000496JBJ, imposing a €38 million fine on E.ON for breach of a seal during an inspection.

European Competition Law

216. Penalties

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Les décisions de justice citées dans ce paragraphe :

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216. Penalties

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Les décisions de justice citées dans ce paragraphe :

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Les notions juridiques connexes

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