The admissibility benchmark for the judicial review of dawn raids in Europe. Has recent case law shifted the boundaries?

Background

The “admissibility benchmark” for legal challenges against implementation measures in the context of dawn raids was set in 2012 with the Nexans and Prysmian judgments.¹ Challengeable measures are only those producing “binding legal effects capable of affecting the applicant’s interests by bringing about a distinct change in his legal position.” Intermediate measures can still be challengeable if they “are themselves the culmination of a special procedure distinct from that intended to permit the EC to take a decision on the substance of the case.”²  The GC concluded that applicants can admissibly contest the legality of an inspection decision, but the legality of actions implementing the same decision, such as copying computer files and interviewing employees can only be examined in an action challenging the final EC decision on the substance of the case. 

The Nexans annulment action was introduced following a European Commission (EC) inspection in the presence of representatives from the French Autorité de la concurrence at Nexans France’s premises in 2009. The EC wanted to investigate whether the company had engaged in agreements and/or concerted practices related to the supply of electric cables and associated materials. The applicants contested the legality of (i) the product scope of the inspection decision and (ii) the EC’s implementation measures to make copy-images of computer files and hard-drives and to interview a Nexans France employee. The GC partially annulled the inspection decision (upheld on appeal before the ECJ)³  in so far as the dawn raid expanded into product markets where the EC had insufficient grounds to suspect any anticompetitive conduct (i.e. all electrical cables, rather than being limited to high voltage electrical cables and their accessories).⁴

The GC held the annulment action targeting the implementation measures in execution of the inspection decision to be inadmissible. These measures were considered intermediate steps that formed part of the inspection decision. The GC rejected the applicant’s submission that requesting electronic copies of the documents individually affected their legal position, since the document pool did not include documents covered by attorney-client privilege.⁵

The GC went on to explain that there were other effective remedies available to the applicant to get judicial protection against the implementation measures. First, the applicant could opt not to comply with the measures that would lead to an EC penalty decision under Article 23 (1)(c) of Regulation No 1/2003 (and likely a hefty fine…). This decision would be individually challengeable, and the GC would also consider the legality of the implementation measure.⁶ Second, the applicant could wait and challenge the final EC decision closing the investigation. Third, applicants could bring a non-contractual liability claim against the EC and prove that they had suffered measurable monetary damage because of the implementation measure. 

ECJ and GC judgments in French supermarkets cases

The GC, and the ECJ on appeal, recently had another opportunity to consider the boundaries of companies’ rights of defence in relation to dawn raids and related implementation measures by antitrust authorities. In Intermarché Casino, Les Mousquetaires and Casino, three interlinked cases⁷ within the food and non-food distribution sector in France. The EC conducted dawn raids based on evidence gathered during unrecorded interviews that took place before the inspection decision was issued. In its judgment, delivered on 9 March 2023, the ECJ annulled the inspection decisions because they could not be legally based on information gathered in such unrecorded interviews. The applicants, had, however, also pleaded that there was no effective judicial remedy against the inspection process under Article 20(4) of Regulation 1/2003. They submitted that judicial remedies must fulfil four criteria derived from the case law of the ECtHR, i.e., they must be (i) effective in providing judicial review, (ii) efficient in providing relief, (iii) accessible with certainty and (iv) reasonably timely.⁸

The ECJ followed the GC in finding that the EU system of remedies fulfilled these criteria and therefore rejected the plea. The ECtHR does not require a particular form of remedy and an overall analysis of all available legal remedies is sufficient to determine the effectiveness of judicial remedies against the conduct of an inspection under Article 20(1) of Regulation 1/2003. The ECJ listed six available remedies, in addition to the possibility of lodging requests to the EC’s hearing officer:

1. An action challenging the inspection decision;
2. An action challenging the EC’s decision penalising obstruction of the inspection on the basis of Article 23(1)(c) to (e) of Regulation 1/2003;
3. An action challenging any act satisfying the conditions laid down in the case law to be challengeable act adopted by the Commission following the inspection decision and during the inspection operations, such as a decision rejecting a request for legal professional privilege (“challengeable acts”);
4. An action against the decision closing the procedure initiated under Article 101 TFEU;
5. An action for interim measures; and
6. An action for non-contractual damages.⁹

The ECJ referred to the GC’s interpretation of the Nexans judgment in that an affected party could challenge an inspecting measure based on an infringement of the privacy of its employees provided it formally opposes the act directly during the inspection and specifies the documents concerned. Interestingly, the ECJ stated that measures by the EC in relation to the right to privacy as well as to the undisputed exception relating to legal privilege, which are open to challenge under Article 263 TFEU, were only cited by the GC as examples.¹⁰

The French Supermarkets case was also brought before the European Court of Human Rights (ECtHR).¹¹ When the applicants informed the court of their intention to withdraw the case due to the ECJ’s annulment of the inspection decision, the ECtHR found that there were no particular grounds relating to the respect for the human rights guaranteed by the Convention and the Protocols thereto which required further consideration of the application. It is, however, worth examining the ECtHR’s position on judicial remedies against dawn raids in other cases.

The position of the European Court of Human Rights

Any discussion on effective judicial remedies against authorities’ dawn raid powers would be incomplete without mentioning the contribution of ECtHR’s jurisprudence in interpreting the European Convention on Human Rights (ECHR). The ECtHR has consistently required effective ex post facto review against national competition authorities’ actions, including in many instances implementation measures. The ECJ agreed with the GC in the French supermarkets cases that this case law must be taken into account when analysing the EU system of remedies.¹²

For example, in the recent UAB Kesko ruling,¹³ the ECtHR concluded that the applicant’s complaint that the seizure of documents was conducted in an indiscriminate manner, encompassing unrelated documents, personal information, and commercial secrets constituted an interference with the right to respect for an undertaking’s home and correspondence (Article 8 ECHR). Since there were indications of possible irregularities committed by the Lithuanian Competition Council, the fact that the investigation was discontinued, exacerbated the harm. For this reason, the Strasbourg Court considered that the alleged violation of rights could never be properly assessed ex post facto by an independent national authority and thus established an infringement of Article 8 ECHR.¹⁴

Similarly, in Delta Pekárny,¹⁵ the ECtHR found that the post-inspection judicial control in the Czech Republic did not guarantee an effective ex post facto judicial review of the necessity of the inspection, and the implementation measures. The ECtHR affirmed that the absence of the need for a prior judicial warrant can be compensated for by effective ex post facto judicial control but emphasised that the court had to be particularly vigilant in these circumstances.

The Strasbourg court’s statements in cases such as Canal Plus¹⁶ and Primagaz,¹⁷ suggest that the right to effective judicial review extends to measures taken during dawn raids as well. The ECtHR underscores the uncertainty in the legal review and the significant delays to which the approach to only admit challenges against the final infringement decision leads. It therefore stresses the need for remedies to be accessible with certainty and reasonably timely. The ECJ seems more restrictive in this regard due to the imposition of the additional procedural requirements set out above, i.e. having to challenge the measure directly and specifying the relevant documents.

The national level – Greek Council of State delivers unexpected verdict

In a rather surprising verdict CoS, the highest Greek administrative court, has adopted a broader approach to admissibility of challenges relating to implementation measures. An application to annul the Hellenic Competition Commission (HCC)’s refusal to unseal documents collected during unannounced inspections was held admissible.

The case started in 2019, when the HCC dawn raided several undertakings active in the banking sector to investigate potential violations of Articles 101 and 102 TFEU and the corresponding Articles 1 and 2 of the Greek Competition Act.¹⁸ The scope of the inspection was very broad, covering all banking and payment services and the collection of a significant quantity of files and other evidence took the HCC inspectors several weeks. A formal investigation followed the dawn raid leading to an in-depth probe concerning the markets for retail and business banking, card issuing and acquiring, inter-banking systems, payment services and electronic transactions that is still open.¹⁹ After the end of the dawn raid and given the scope of the formal investigation against the wide spectrum of the documents collected (in copies) during the inspection, Piraeus Bank sought the release of several files that it considered unrelated, but the HCC refused.

In light of GC’s Nexans judgment, it might have been expected that the challenge of the HCC’s refusal to release documents that the applicant considered unrelated to the subject-matter of the case would have been held inadmissible as an implementation measure following the dawn raid. But the CoS reached the opposite conclusion. Even if the refusal was an implementation measure it nevertheless had “independent legal effects,” constituting a critical step of the administrative procedure that affected the scope of documents available to the HCC in the future. Allowing the HCC to maintain copies outside the scope of the investigation would place these documents “beyond the reach of judicial review” in violation of the applicant’s right to an effective remedy.

Given the complexity of the issues involved, the CoS did not discuss the merits and referred the case to an extended composition of judges.²⁰ Eventually the investigation was settled last December with the imposition of fines and a behavioural remedy²¹ and the case was withdrawn from the CoS.

Conclusion

In the French Supermarkets cases the ECJ has remained largely consistent with Nexans but based its assessment of the compatibility of the EU system of remedies on ECtHR case law. The ECJ has moreover, in accordance with the GC, clarified the system of EU remedies, listed the six available legal actions and assessed their compliance with the four criteria laid down by the ECtHR, namely effectiveness, efficiency, certainty and reasonable timeliness. The available catalogue of remedies was then held to be compliant with the ECtHR requirements.

The GC’s approach in Nexans could be viewed as harsh as it requires applicants to risk a fine by waiting to receive an infringement decision before being allowed to challenge the legality of an intermediate implementation measure taken in the investigation phase. In previous cases, the ECJ had only allowed the exception of legal professional privilege claims²² in the execution phase of an inspection. Already in Nexans the GC had alluded, however, that an EC decision rejecting a request for protection of privacy could potentially be a challengeable act under Article 263 TFEU as well. In the French Supermarkets cases the GC picked up this line of argument whilst acknowledging that the EU courts had never declared such an action admissible. It then set out the procedural requirements for such a challenge that still seem to be more restrictive than the requirements of the ECtHR would suggest. Eventually, the ECJ qualified the acceptance of this category of actionable measures as a specific case of settled case law.

The evolving case law in this area demonstrates that the scope of admissible challenges against implementing measures of dawn raids is not static. It remains to be seen whether there will be any further developments at the national or EU level.