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On October 5, 2020, the General Court of the European Union (“GC”) annulled in part the European Commission’s (“EC”) inspection decisions against French retail companies Casino, Intermarché Casino Achats and Les Mousquetaires. The EC suspected anticompetitive practices by these retailers.

Inspections at the companies’ premises

In February 2017, the EC inspected the premises of French retailers Casino, Intermarché Casino Achats and Les Mousquetaires suspecting anticompetitive practices. The EC had been warned about information exchanges between various companies and business associations from the food and non-food retail market.

The EC decision addressed two alleged infringements that the EC wanted to clarify. First, information exchanges about (i) discounts obtained on the supply markets of certain everyday consumer products, and (ii) the prices on the market for the sale of services to manufacturers of branded products. Second, information exchanges about future business strategies of Casino and Intermarché.

Various companies under investigation brought actions for annulment against the inspection decisions before the GC

Some of the companies challenged the EC inspections, bringing actions for annulment based on various lines of reasoning.

First, some of the applicants (case T-255/17) claimed that the EC made copies of employees’ and managers’ private data, which the EC refused to return. The GC acknowledges that the companies must seek the protection of personal data, and therefore may request the EC to not collect certain information, or to return any copies of it. However, as the companies did not clearly request that the EC return the data, the EC could not give an appealable response.

The GC dismissed the plea of illegality relating to whether there was sufficient evidence to conduct inspections and to companies’ obligations to submit to the inspections. The GC found that the standard of “sufficient evidence justifying inspections” must be lower than the standard to find concerted practices, adding that the emails exchanged by the alleged infringers, which were in the EC’s hands before the investigation began, constitute sufficient evidence to justify the inspections.

In response to the applicants’ claim that there had been a breach of the right to an effective remedy, the GC relied on the European Court of Human Rights (“ECHR”) case law. The GC noted that the judicial review system available to companies against inspections meets the four case law requirements: (i) the possibility to obtain an appropriate remedy (ii) effectiveness; (iii) certainty; and (iv) that courts conduct judicial review within a reasonable time. Consequently, the GC did not find a breach of the right to an effective remedy.

The GC also dismissed the claim that there had been a violation of the equality of arms principle and the right of defence. The GC referred to settled case law arguing that the EC must not disclose the evidence justifying the inspections, since that would render any investigations ineffective. Additionally, the GC found that the EC did not violate its obligation to state reasons, since the inspection decisions show, in detail, that the EC had sufficient evidence to suspect competition law infringements.

Finally, the applicants claimed that there had been a breach of the right to the inviolability of the home. The GC evaluated if the EC had solid evidence to suspect anticompetitive practices by the companies under investigation. Regarding the first anticompetitive practice, the EC had companies’ emails with the suppliers regarding product prices and discounts. The GC considers these as solid evidence, thus providing grounds for the EC to launch its investigation.

However, as for the second anticompetitive practice, the EC relied on mere statements about the company’s business strategy made at a conference by a director. According to the GC, this is not sufficient evidence to justify an inspection. Therefore, the GC upheld the claim related to the inviolability of the home regarding the second anticompetitive practice, annulling in part the inspection decisions.

Conclusion

The GC partially upheld the claims, based on the breach of the right to the inviolability of the home, since the EC did not prove that it had solid evidence regarding one of the suspected infringements justifying the inspection. The GC thus partially annulled the EC inspection decisions.

The judgment is a reminder for the EC and national competition authorities that they must (i) carefully gather the evidence justifying the inspections, and (ii) specifically define the suspected infringement in order not to go on fishing expeditions, which are not allowed.

The full judgments are available here: T-249/17 (Casino, Guichard-Perrachon and Achats Marchandises Casino SAS (AMC) v Commission), T-254/17 (Intermarché Casino Achats v Commission) and T-255/17 (Les Mousquetaires and ITM Entreprises v Commission).

Authors: Irene Moreno-Tapia, Alba Gubía, William Beaven

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Especialista en acuerdos de distribución y abusos de posición dominante, asesora regularmente a importantes multinacionales y fondos de inversión en materia de control de concentraciones, tanto a nivel español como comunitario, asumiendo su representación ante las instancias administrativas. Ha representado y asesorado con éxito a numerosos clientes ante las autoridades españolas en materia de defensa de la competencia, en los dos ámbitos administrativo y contencioso (acuerdos, abusos, concentraciones, ayudas públicas).

irene.moreno@cuatrecasas.com

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alba.gubia@cuatrecasas.com

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william.beaven@cuatrecasas.com