European court upholds fine for E.On for seal breach during dawn raid

Wednesday, 15 December 2010

The European General Court has upheld the fine of € 38 million on E.On, a German energy firm, for breaking a seal during a dawn raid. The fine was not disproportionate to the infringement given the particularly serious nature of breaking a seal, according to the European General Court. 

The European Commission placed a seal on a door at the end of a day during an antitrust inspection in May 2006. When officials of the European Commission wanted to continue their investigation the following morning they noticed the seal on a door was breached. The European Commission may seal any business premises and books or records for the period and to the extend necessary for the inspection. A fine of up to 1% of the annual turnover of an undertaking may be imposed when a seal has been broken. 

The European Commission imposed a fine of  € 38 million on E.On in January 2008 for this breach. During the court hearing E.On questioned the fact that the seal was placed in a right order. It put forward that the seal was out-of-date or that vibrations in an adjacent room caused the breach of the seal. Despite of the explanations of E.On the fine was upheld by the European General Court. The fine for E.On was the first individual sanction imposed by the European Commission for a procedural breach. E.On was under investigation in relation to alleged anticompetitive conduct on the national electricity market.