Investigation and

Enforcement of

competition law

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

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

"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

"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

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

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

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

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.

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

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

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.

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

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

Thank you!

• Julija Jerneva

• Mobile: +371 29131597