Compliance Warning for "Dawn Raids"
On 4 June 2010 the European Commission announced that it had opened formal proceedings against French group Suez Environnement concerning an alleged breach of a seal affixed during a Commission on-site inspection (“dawn raid”) at the premises of the group’s subsidiary, Lyonnaise des Eaux in April of this year. This news comes a week after press rumours that the Commission was considering taking similar action against a Czech energy company arising out of a “dawn raid” in November 2009.
These recent events draw attention to a growing number of cases in which companies are being prosecuted or penalised for obstructing a Commission “dawn raid”. In January 2008 the Commission imposed a fine of EUR 38 million on a German energy company for allegedly breaking seals affixed during an inspection, a fine which is being appealed before the EU General Court. Other examples include a pharmaceutical company that faces potential fines for refusing to produce documents during a “dawn raid” and a video-tape producer whose fine was increased because one of its employees failed to answer certain questions during a “dawn raid”.
These examples illustrate how important it is for corporate antitrust compliance procedures to include clear instructions as to who is to take responsibility for a company’s response to a “dawn raid” and what the company’s legal rights and duties are in such situations. McDermott’s antitrust lawyers have broad experience in counselling companies on setting up such procedures both in Europe and the United States.