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 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 o Do 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 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! Jūlija Jerņeva Mob: