Fines for breach of seal imposed by the European Commission and the Netherlands Competition Authority

Tuesday, 13 September 2011

The Netherlands Competition Authority (‘NMa’) and the European Commission (‘Commission’) have recently imposed fines for breach of seal. During investigations concerning anticompetitive behaviour competition authorities have the power to seal offices that are subject to the investigation. In order to protect evidence. 

Breach of seals
During investigations regarding anticompetitive behaviour competition authorities make use of their power to seal offices. In this way competition authorities try to prevent the manipulation or disappearance of evidence. Placing seals is crucial to obtain evidence and the preservation of it.

NMa
The NMa also sealed offices during the antitrust investigation into anticompetitive behaviour of the National Association of General Practitioners (‘LHV’). The seals were however breached. Therefore the NMa imposed a fine of EUR 51.000 on the LHV in the decision of 9 September 2010. The LHV lodged a notice of objection to this decision. The NMa dismissed the objections in the decision of 18 August 2011. In this decision the NMa underlines the seriousness of breach of seals. The fining guidelines of 2009 (‘Boetebeleidsregels 2009’) are applied to this case. These guidelines point out a gravity factor running from 0 to 5. The NMa took a gravity factor of 2 into account in this case, because of the duration of the breach. A long time passed between the moment of the breach and the discovery. There is however no certainty that the seal breach did actually have a negative impact on the investigation. According to the NMa there are no other circumstances that justify an increase or decrease of the factor of gravity.

European Commission
Also the Commission fined undertakings for breach of seals. Suez Environnement was fined for such an infringement. The seals placed on offices of a subsidiary of Suez Environnement, Lyonnaise des Eaux (‘LDE’), were breached. Suez Environnement and LDE convinced the Commission that they did not had the intention to breach the seals. In addition, both undertakings cooperated with the Commission regarding the investigations. Amongst others, the undertakings provided evidence like video-tapes and interviews with employees. The Commission would not have been able to gather this evidence itself. Because of these fine mitigating circumstance Suez Environnement was only fined EUR 8 million.

It is not the first time the Commission imposes fines for a breach of seals. The General Court confirmed in 2010 the decision of the Commission to fine the German energy company E.ON EUR 38 million for breach of seals.

In addition, its worth noting that LHV made reference to the press release of Suez Environnement (24 mei 2011) in her notice of objections in relation to fine mitigating circumstances. The LHV was of the opinion that the same fine mitigating circumstances applied in her case, because of their active cooperation with the NMa. This objection didn’t change the findings of the NMa. According to the NMa the two cases are not equal and LHV does not qualify for the same fine mitigating circumstances.