Short on enforcement and investigation in EU competition law

1. Investigation and
Enforcement of
competition law

2. Investigation and Enforcement
Under Regulation 1/2003, Commission can -
•Enter and seal premises inside the EU
•Examine private homes and cars of personnel inside the EU
•Examine and copy companies' business documents
•Download from computers and copy email files
•Question individuals on site
•Impose fines for failure to cooperate with investigation

3. Investigation and Enforcement (cont’d)
Companies must comply with Commission inspection
decisions and cooperate with inspectors
Non-cooperation may lead to procedural fine or increase in
amount of overall fine
On an individual level –
•Cooperate with Commission officials
•Don’t attempt to co0nceal or destroy documents
Both company and personal liability are at stake

4. "Dawn Raids"
Commission officials have power to conduct
inspection visits
Inspections can occur without any warning at
any time
Survival tips:
•Cooperate, be friendly and stay alert
•Inform management, Legal Department and external
counsel
•Ensure that search stays within its scope
•Don’t destroy documents while investigation is going on
•Keep accurate minutes

5. "Dawn Raids" – Documents (cont’d)
We may not be legally required to hand over all
requested documents
Communications with external counsel are protected
by legal professional privilege
If Commission officials request privileged
documents from you –
• Refuse to provide documents based on attorney-client privilege
• If officials insist, request that documents be placed in sealed envelope
until legal status can be ascertained

6. Suez Environnement and Lyonnaise des Eaux
• From 13 to 16 April 2010: the Commission conducts a dawn
raid (seals are used to protect the non-inspected premises).
• Coming back one morning, the Commission officials found that
a seal had been broken at LDE's headquarters (the seal
showed "OPEN VOID").
• EUR 8 MIO fine

7. Enforcement - Leniency Programme
Companies can apply for more lenient treatment
by “confessing” to Commission
This encourages cartel parties to “blow whistle”
on cartel activities/members
First party to confess may receive 100% reduction from any fine
Other parties who confess may receive significant reductions, but much
less than first whistleblower

8. Enforcement - Leniency Programme (cont’d)
If you participate in or learn of anticompetitive
discussions –
•Competitor may disclose all your discussions,
writings, etc., to competition authorities in
exchange for leniency
oDo not trust any of your competitors!
• Report incident as soon as possible to management and/or Legal
Department to give our company a chance to be first to apply for leniency
o Report it orally to avoid creating documents that could be seized by
competition authorities

9. Pop Quiz!
You are new to your job and realize that your predecessor was regularly
exchanging prices with the company’s competitors. Which of the following
presents your best course of action?
A.Continue your predecessor’s activities if it would be helpful for the
company.
B.Stop exchanging prices with competitors and inform your Legal
Department as quickly as possible.
C.Phone the authorities directly to report the conduct.

10. Careful Communication
Consider carefully your language in both internal
and external communications
Ill-considered language can be very damaging
•It can make legal activity appear illegal
•It can colour authorities’ or complaining parties’ views
as to intent
Be careful with both written and oral
communications
Competition law authorities are looking to careless statements in email as
proof of anti-competitive conduct or intent

11. Rules for Written Communication
• Speak to in-house counsel before recording
matters in sensitive areas
• Consider that what you record could be viewed by
a third party – e.g., judge or competition
authority
• Avoid speculation about legality/illegality of your
conduct
• Don’t express your doubts in written
communications

12. Pop Quiz!
Which of the following phrases would be appropriate in either internal or
external communications?
A.To be destroyed after reading.
B.It has been agreed not to make any notes.
C.During the negotiations, the customer told me that our competitor’s price
for this quarter is 200.
D.My source told me that our competitor’s price for this quarter is 200.

13. Rules for Multi-Party Agreements
• Avoid any suggestion that a collection of
competitors has reached a view on a particular
issue
• Do not record anything implying that prices (or any
important business decisions) are based on
something other than the company's
independent business judgment
• State clearly the source of any (pricing)
information
• Ensure that you keep accurate records of all
competitor contacts and review notes with Legal
Department

14. Rules for Dominant Companies
• Avoid giving any customer the impression that it is
getting special treatment
• Avoid –
o"This will enable us to dominate the market"
o"We have virtually eliminated the competition"
• Avoid suggesting that company has a strategy to
drive out competitors

15. Thank you!
• Julija Jerneva
• Mobile: +371 29131597