Commission Alleges Obstruction by Czech Companies During Onsite Inspection

On 20 December 2010 the European Commission announced that it had sent a statement of objections ('SO') to J&T Investment Advisers and Energetický a průmyslový alleging obstruction of an investigation into possible breaches of Articles 101 and/or 102 TFEU in the Czech wholesale electricity sector.  This follows unannounced inspections undertaken from 24 to 26 November 2009 by the Commission and the Czech competition authority at the premises of a number of companies in the electricity and lignite sector. 

The Commission's investigation relates to the conduct of J&T Investment Advisers and Energetický a průmyslový during the onsite inspections and focuses on whether their actions amounted to a refusal to submit to the inspection and whether they failed to produce complete versions of the required records.  The SO sets out the Commission's preliminary view that the parties:

• Failed to block an email account.  Inspectors typically identify key individuals whose email accounts should be blocked during an inspection in order to prevent the destruction of data;
• Failed to open encrypted emails.  The Commission considers that its power to obtain uninhibited access to companies' premises and to take copies of relevant documents requires companies to give passwords that may protect secured emails; and
• Diverted incoming emails.  As well as blocking email accounts to prevent the destruction of data during the inspection, the Commission also requires access to emails that are exchanged during the course of an investigation.

The Commission has authority to fine a company up to 1% of its total turnover in the preceding business year if it finds that a company breached its obligation to submit to an inspection or intentionally or negligently failed to produce the required records in complete form.

The Commission states that its power to carry out onsite inspections is one of its most important investigative tools.  Indeed in recent years, the Commission has become increasingly proactive in taking action against any perceived breach of these powers (there is a similar action in the pipeline for alleged seal breaking against Suez Environnement) underlining the need for businesses to ensure they have proper procedures in place to deal with dawn raids.

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