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IT Obstruction of Dawn Raids

10 April 2012
IT Obstruction of Dawn RaidsFor the first time, the European Commission has fined a company for the specific violation of obstructing IT searches during a dawn raid (on-the-spot inspection) which was carried out as part of an antitrust investigation.

On 28 March 2012, the European Commission fined Czech energy companies Energetický a průmyslový and EP Investment Advisors EUR2.5 million for various IT obstructions.

What happened? The European Commission raided the companies' premises in Prague in November 2009. On arrival, the inspectors asked that the email account of certain key individuals be blocked until further notice. This is the European Commission's standard dawn raid procedure, and is aimed to ensure that modifications are not made to email accounts. During the course of the inspection, the inspectors discovered firstly that the password for one account had been modified which allowed an employee to access the account, and secondly that one employee had requested the IT department to divert all emails arriving in certain blocked accounts away from these accounts to a server. This enabled incoming emails not to be visible to the inspectors and compromised the overall integrity of the European Commission's search.

This is the first time that the European Commission has fined a company for the specific violation of obstructing IT searches during a dawn raid. Fines in the past have been for breaching seals that have been imposed overnight during inspections to prevent entry into rooms and other areas where the inspectors have left documents and equipment overnight. Recently, the European Commission fined E.ON EUR38 million and Suez Environnement and Lyonnaise des Eaux EUR8 million for breaching seal. The European Commission has also in the past penalised companies where company representatives have refused to answer questions and shredded documents during an inspection. Sony, for instance, had its antitrust fine increased by 30% for this violation.

In the increasingly paperless office environment, IT search is a key part of the European Commission's dawn raid powers, whose integrity the European Commission is currently very keen to protect. It is critical that companies, including their IT staff are fully aware of the extent of the European Commission's antitrust dawn raid powers and understand their rights of defence.

Hogan Lovells has developed for its clients an e-learning course on how to deal with dawn raids. This is an interactive screen-based course which employs a series of role plays to deliver training to a number of staff within any organisation. We offer our clients free access to this course. Should you be interested in a demonstration, please do not hesitate to contact your usual Hogan Lovells contact or Peter Citron.

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