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Investigative powers in practice – EUROPEAN UNION – November 2018 OECD GFC

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This presentation by the EU Delegation was made during Break-out session 2: Requests for Information – Limits and Effectiveness, of the discussion on “Investigative Powers in Practice” held at the 17th meeting of the OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/invpw.

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Investigative powers in practice – EUROPEAN UNION – November 2018 OECD GFC

  1. 1. Investigative Powers in Practice Requests for Information Limits and Effectiveness Christos TSOUMANIS European Commission DG Competition Merger Case Support and Policy Paris, 30 November 2018
  2. 2. Agenda How to prepare a request for information1. Internal documents - how to handle large amounts of complex information2. How to detect potentially incorrect information3. 2 The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission.
  3. 3. Collect facts to substantiate and motivate decision Collect facts for possible remedies negotiation Assess merger’s competitive impact Understand products and inner workings of markets Goals of the fact finding exercise 3
  4. 4. Planning the market investigation • Discuss and prepare market investigation plan  Goal: Identify priorities • Identify sources of evidence and pertinent facts to collect (type of information needed, likely sources of information and method to gather information) • Plan administrative tasks and timing • Revise/adapt the investigation plan in the course of investigation 4
  5. 5. Drafting the questionnaire (1) • Collect hard facts rather than opinions • Focus the questionnaire • Identify the crucial points of the case (product/geo market definition, etc.)– avoid unnecessary questions • Identify crucial information to be gathered • Bear in mind the background (possible bias) of the addressee • Be able to reverse engineer the questionnaire – know where each piece of information will fit 5
  6. 6. Drafting the questionnaire (2) • Use simple/comprehensive language (no competition jargon) • Use precise industry/sector terminology • Be specific (avoid regularly/sometimes/timely) • Specify exact kind of data/measures requested: (e.g. kilotons, MWh, euros, precise period) • Avoid ambiguity and too general questions • Avoid leading questions • Revise the question as if in the respondent’s shoes • Use open ended questions to raise issues, obtain more in- depth explanation – take time to answer/assess/translate • Use closed questions (dichotomous or pre-coded, scales/ranking) – easy to collect/assess but risk of error if not well formulated 6
  7. 7. Requests for internal documents (1) • Useful evidence • Often source of particularly relevant evidence • Frequently established independently of the merger control procedure • Generally no confidentiality issues vis-à-vis the notifying party(-ies) • But: • Used generally in complex merger investigations • They require internal resources and place burden on the company • Sometimes they result in large amounts of complex information and large sets of responsive internal documents • Internal documents must be interpreted in their context • Internal documents remain only one piece of the puzzle 7
  8. 8. Requests for internal documents (2) • If it is necessary to issue a request for internal documents, scope it carefully • For simple cases: normally merger-specific reports and studies suffice (e.g. section 5.4 of Form CO) • For more complex cases you may ask for: • Business plans • Sales and marketing reports, capacity utilisation reports etc. • Strategy and pricing documents • Submissions filed with national regulators (energy, telecoms, media etc.) 8
  9. 9. Third parties’ internal documents • Carefully consider such request and usually limit to specific situations/third parties • Confidentiality issues may restrict the use of third parties’ documents • Proportionality issues: burden for companies which are not directly involved in the merger 9
  10. 10. Scope of internal documents request • There is no one-size-fits-all approach: • Comprehensive request • Sequential requests • Timing is crucial to extract the most relevant and targeted information • Send RFI as early as possible • Start reviewing early • Focus resources on what truly matters • Discuss internally ToHs and investigative strategy • Find the elements on which internal docs will likely be a particularly relevant source of information 10
  11. 11. Understand the company 11 • Organisation charts (organigrams) • How decision making process works • Key people involved in the decision process on the relevant markets • Reporting lines • Board members • Members of the executive committee(s) • Yearly/quarterly/monthly reports on the markets/products concerned • Email and document retention policy • Business terminology (terms, jargon, code names)
  12. 12. Drafting the RFI 12 • Time frame • Companies covered • Custodians • Types of documents • Topics • Search terms • Format of the response (file structure) • Deduplication
  13. 13. Sharing a draft RFI with the Parties • Where possible and appropriate, discuss with the Parties how to possibly refine and reduce the scope of the request: • The company is able to focus its search on the documents really needed by the Commission and therefore increases the possibility to submit the answer within the deadline without risking delays in the procedure. • The case team is able to concentrate its efforts on the documents really needed and therefore saves time for analysis and internal steps in the decision making process. • Parties to perform the search and provide a quantified overview: • Custodians selected • Search terms and hit count — Number of total hits — Number of unique hits — Number of documents per search terms (or per topic) to be submitted 13
  14. 14. Process the reply • Upload all documents to your Document Review IT solution • Check that all documents are OCRed • Index all documents to make them searchable • Keep file structure that was agreed with Parties 14
  15. 15. Document review strategy • Linear vs. non-linear review (or mix) • Single tier vs. two-tier (or mix) • Evidence master document • Search term master document • Tag/label codebook • Team coordinator • Gather previous experience and intelligence 15
  16. 16. Detect potentially incorrect information by cross checking with the following • Form CO • Internal documents from the parties and third parties • Meetings with notifying and third parties • Site visits, inspections • Information requests • (Telephone) interviews • Public sources of information (Internet, library, etc) • Contacts with other authorities (request waiver from parties if necessary) • Econometric / customer surveys 16
  17. 17. 17 THANK YOU

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