On 5 October 2020, the EU General Court ("GC") partially annulled European Commission ("Commission") decisions ordering inspections at ITM and Casino's premises in 2017 following suspicions of illegal anticompetitive exchanges of competitively sensitive information.
| what you need to know - key takeaways |
- The Commission may justify dawn raids based on third party testimonies, even though they are not recorded.
- Dawn raids conducted on the basis of evidence which is not serious enough to suspect an infringement must be annulled.
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In February 2017, the Commission issued several decisions ordering French retailers ITM and Casino to submit to inspections. The Commission suspected three different anticompetitive information exchanges relating to: discounts obtained from suppliers; the price of commercial services sold to suppliers; and future commercial strategies. A few days later, the companies' premises were raided with the support of the French Competition Authority.
Following these inspections, ITM and Casino brought an action before the GC seeking the annulment of the decisions authorising the inspection.
The GC found that the inspections relating to exchanges of information on rebates and prices were supported by sufficient evidence. In particular, the Commission was entitled, according to the GC, to rely on testimonies made by suppliers of ITM and Casino, the content of which were simply written down in the Commission officials' notebooks. According to the GC, at this stage of the investigations, these testimonies did not have to be formally recorded or minuted. The GC pointed out that formal interviews could make witnesses reluctant to testify.
By contrast, the GC found that the inspections were not supported by sufficient evidence in relation to the suspected information exchange on future commercial strategies. The Commission was relying on the mere presence of a Casino representative at a meeting held with the main suppliers at ITM's headquarters, during which general information had been disclosed on ITM's future plans regarding target customers, the opening of new shops and drive-throughs, digital transformation and the development of e-commerce, innovations aimed at accelerating the shelving of new products, and new promotional efforts. According to the GC, this evidence alone was not sufficient to justify a raid on the applicants' premises since the meeting had been held in public in the presence of journalists and the information disclosed had been very general and merely aimed at promoting ITM.
As a result, the inspections are partially annulled in respect of the suspected exchanges of information on future commercial strategy. The Commission is therefore prohibited from using the corresponding evidence against the companies, and subsequent inspections carried out in 2019 and grounded on that evidence should also be annulled. It is now for the Commission to determine which evidence, among all documents and other information seized during the dawn raid, must be set aside as a result of the partial annulment. This might give rise to further legal controversy.
With thanks to Alexandre Marescaux of Ashurst for his contribution.
