On 14 November 2012, the General Court handed down two judgments on appeal by Nexans and Prysmian, challenging Commission decisions providing for unannounced on-site inspections (dawn raids) in the electrical cables sector. In each case, the General Court partially annulled the Commission's inspection decisions, providing interesting guidance on the permissible scope of on-site investigations and reiterated the point that the Commission may not embark on a "fishing expedition" in the course of such investigations.
The Commission's inspections concerned "the supply of electric cables and material associated with such supply, including, amongst others, high voltage underwater electric cables, and, in certain cases, high voltage underground electric cables". The applicants brought actions before the General Court challenging, firstly, the breadth of the Commission's inspection decision establishing the scope of the inspection, and, secondly, the Commission's actions during the inspection, namely the removal of computer hard drives for later inspection using the "sealed envelope procedure" and the on-site questioning of an employee.
Arguing the imprecision of the mandate contained in the inspection decisions, the applicants claimed that the scope of the inspections was overly broad and vague. This claim was rejected by the General Court. The Court nevertheless held that the use of terminology such as "in certain cases" and "amongst others" in the text of an inspection decision was ambiguous. The Court further established that the Commission may not carry out a "fishing expedition" during inspections and must have reasonable grounds to adopt an inspection decision. The inspection powers of the Commission are restrained by what is specifically provided in the authorization decision, and the duty of cooperation imposed on undertakings is therefore not unlimited. Despite the Commission's inspection decisions referring to electrical cables generally, the Court held that the Commission only had reasonable grounds to suspect an infringement of Article 101 TFEU in relation to high voltage underwater and underground cables. The Court therefore partially annulled the two decisions at issue, insofar as the Commission did not have reasonable grounds to adopt an inspection decision in relation to electric cables other than high voltage underwater and underground electric cables. The Court however refrained from specifying the consequences of its ruling on the ongoing investigation.
With regard to the on-site questioning of employees, the General Court confirmed that the Commission must limit its questioning to information relevant to the subject matter of the inspection, but also held that the steps taken to question employees during an inspection were mere measures implementing the inspection decision rather than separately reviewable decisions. Hence, the Court held that disputes over procedural issues arising in the course of inspections, such as oral explanations from company representatives, can only be challenged before the Court once the Commission has issued a final infringement decision.
The Court then examined the Commission's sealed envelope procedure whereby computer files are copied to a hard disk on-site and placed in a sealed envelope for subsequent review at the Commission's premises in the presence of company representatives. The Court held that this procedural act was again a mere implementing measure, and so not a reviewable act in its own right at this stage of the investigation, unless the act could be shown to produce immediate legal effects, as is the case with documents covered by legal professional privilege.
The General Court judgments provide welcome guidance on the permissible scope of on-site inspections. It is likely that future inspection decisions will be drafted more cautiously and precisely, as any lack of precision would run the risk of annulment. The defined scope of the inspection decision must accurately reflect the grounds which have led the Commission to reasonably suspect an infringement. Further, the judgments make clear that acts taken by the Commission in the course of inspections are non-reviewable implementing measures. Therefore, should an undertaking wish to challenge any of these steps, the undertaking would have to wait until the adoption of the final Commission decision. In the meantime, it will have to submit to the inspection if it does not want to take the risk of incurring a fine for failure to cooperate.
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