The Netherlands Authority for Consumers & Markets (ACM) has imposed a record fine of €1.84 million on a company for obstructing a cartel investigation. ACM carried out a dawn raid at the company on suspicion of possible involvement in anti-competitive agreements. Employees of the company left WhatsApp groups and deleted chats during the dawn raid, which is prohibited.
The General Administrative Law Act gives ACM far-reaching powers if it suspects a violation of the (Dutch) Competition Act. Those powers include entering business premises and demanding access to or making copies of documents. Companies are obligated to cooperate in the investigation and may not destroy or withhold evidence. On breach of these rules, ACM may impose a maximum fine on the company of 1% of the group turnover (and a maximum penalty of €900,000 on the person in question).
ACM informed the employees at the start of the dawn raid that they were required to cooperate and were not allowed to destroy evidence. The company (later) acknowledged that its employees had wrongly left WhatsApp groups and deleted chats. The company subsequently cooperated in the investigation into the material removed in a manner that went beyond its statutory obligations. ACM reduced the fine by 20% on that ground. The fine is in keeping with ACM’s increased investigation efforts. ACM is currently investigating, for instance, a purchasing cartel in the agricultural sector, irregularities in the civil and hydraulic engineering sector in the municipality of Amsterdam, and price-fixing agreements among manufacturers and retailers of consumer goods.
Under Regulation (EC) 1/2003, the European Commission has similar powers to enforce the European competition rules. Last year, for instance, the European Commission investigated Slovak rail company ZSSK for removing data from a laptop during a dawn raid. The European Commission ultimately decided not to fine the company because the information had not been intentionally removed.
The obligation to cooperate does not mean that companies must give inspection officers free rein during a dawn raid. Companies and their employees also have important rights, such as the right to remain silent and the right to legal representation. The fine imposed by ACM again demonstrates that companies should be aware of their rights and obligations, to avoid unpleasant surprises later on.
This blog was also published in the Snelrecht column of the Mr. journal. The article can be found here.
Further information on dawn raids by ACM and the European Commission can be found at invalacm.nl.
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