COMPETITION • EUROPEAN LAW • PROCEDURE
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 is free to 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. The Commission’s 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.
An inspection may be conducted upon production of a simple authorization which must be in writing and must specify the subject-matter and purpose of the inspection and the penalties provided for in case the undertaking concerned fails to cooperate (Regulation No 1/2003, Article 20(3)). That authorization must be produced by authorized officials. Before the inspection takes place the Commission must inform the competent authority of the Member State in whose territory the inspection is to be conducted “in good time” of the mission of the investigation (subject-matter and purpose) and also of the identities 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.
Authorized officials may conduct an inspection ordered by formal decision (Regulation No 1/2003, Article 20(4)). In this case, 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. 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. 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. 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. Thus, 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.
Authorized officials have wide powers of investigation which were reinforced notably by Regulation No 1/2003. Under Article 20(2) of the regulation, officials are authorized to:
– enter any premises, land and means of transport of undertakings and associations of undertakings;
– examine the books and other business records, irrespective of the medium on which they are stored;
– take or obtain in any form copies of or extracts from such books or records; the Commission determines the business documents which must be produced and of which it intends to take copies; it must be able to obtain the information necessary to carry out the inspection without having to identify precisely the necessary documents in advance; at the same time limiting the investigations to the activities referred to in the inspection decision and refraining from using documents it has consulted which do not fall in that category; as there is no provision requiring companies’ books or business documents to be inspected at the firm’s premises, the inspection may be carried out at the Commission’s headquarters, where the seals affixed are opened in the presence of the representatives of the undertaking; the fact that the documents seized concern a party exterior to the inspection measure does not call into question the legality of the operations insofar as they come within the scope of application of the investigation; the undertakings can at any time ask the Commission to return the business documents or copies that are not related to the subject-matter of the inspection; lastly, Commission inspectors cannot be challenged for not restricting themselves to demanding the production of documents clearly and obviously related to the subject-matter of the investigation, in the absence of evidence that they have conducted searches outside of that remit;
– seal any business premises and books or records for the period and to the extent necessary for the inspection;
– ask any representative or member of staff of the undertaking or association of undertakings for explanations on facts or documents relating to the subject-matter and purpose of the inspection and record the answers.