White & Case Succeeds in Reining in Commission’s Dawn Raid Decision
Global law firm White & Case achieved success today before the European Union's General Court for power cable company Nexans in a high profile challenge against the European Commission's cartel investigation in the power cables sector. The General Court partially annulled the Commission's dawn raid decision on the basis that the Commission lacked reasonable grounds for ordering an inspection covering "all electrical cables". Essentially, the Court agreed with Nexans’ contention that the Commission over-extended the subject-matter of its dawn raid decision and purpose of the inspection and undertook a ‘fishing expedition’ at the premises of Nexans France.
In January 2009, Commission officials conducted a dawn raid at Nexans' France premises. White & Case lodged an appeal against the dawn raid decision shortly afterwards to contest several procedural irregularities. White & Case's key grounds of challenge, as argued by Mark Powell, were that the dawn raid decision was too broad and that the Commission had exceeded its powers by removing a copy of an entire hard-drive and four DVD-ROMs for subsequent review in Brussels.
It is to be welcomed that the Court is willing to look at the underlying evidence relied on by the Commission, to establish whether it had reasonable grounds for suspicion of an infringement. The Court, after considering the evidence put forward by the immunity applicant, found that the Commission knew that there were differences between different types of electrical cables at the time of the adoption of the dawn raid decision and had erred by including "all electrical cables" within the scope of its investigation.
For the Court to conclude that the inspection decision was defective, particularly before any final decision has been taken, is constitutionally significant. Contrary to proceedings in the majority of EU Member States where judicial approval of a search warrant is required before its execution, there is currently no judicial review of inspection decisions before they are implemented.
However, the Court has chosen not to exercise timely judicial scrutiny over the Commission's ever-increasing enforcement reach, finding that the Commission's removal of a copy of an entire hard-drive did not amount to a self-standing act capable of being challenged before the adoption of any final decision.
Today's achievement adds to other significant court case successes for the competition team in 2012, following on from victories for Toshiba, Kaucuk, Unipetrol and Uralita in major cartel cases also heard before the EU General Court. "Around the world, there is an emerging trend towards due process rights being recognized by the courts in cartel cases. Today's judgment is another step towards the practical recognition of due process rights including of privacy and of rights of defense in Europe" said White & Case partner J. Mark Gidley.
The White & Case team was led by partners Mark Powell (Brussels) and Jean-Paul Tran Thiet (Paris) with the support of associates Genevra Forwood, Grant McKelvey and Alexandra Rogers. The team was assisted by White & Case partners (Washington DC) J. Mark Gidley and Peter Carney (Washington DC).
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