18 May 2016

Opening Pandora’s (in)Box: Social Media & Cartels?

At a recently held conference in Singapore the Director of the Cartels Directorate of DG Competition of the European Commission (the “Commission”) addressed the issue of investigative powers of the Commission and collection of evidence during dawn raids. In particular, they emphasized that the Commission has to “keep up with the technology” in order to effectively combat illegal price fixing and market sharing.  According to him, that could be achieved by finding ways to collect data from online social networks so to determine whether individuals are involved in infringement of competition rules. In that respect, it was emphasized that the Commission is now looking for ways to obtain such evidence from individual social network accounts.

According to the representative of the Commission, the Commission is already authorized to obtain data from an individual social network account based on the European Union rules that give the Commission extensive investigative powers, primarily the power to investigate “any premises where the business records may be kept1, including private homes”.

Although it is correct that under the Article 21 of the Regulation No. 1/2003 (the “Regulation”), the Commission may enter any other premises, including private homes of directors, managers and other members of staff of the undertakings and associations of undertakings concerned, the Commission can examine such premises only after it establishes that the conditions set out in the Regulation are met.2  Namely, the Commission first has to establish “reasonable suspicion” that books or other records related to the business and the subject matter of the inspection are kept in those premises.  Secondly, the books and records that the Commission is seeking have to be collected to prove a serious violation of the antitrust rules of the Treaty.3  Thirdly, the Commission’s decision to inspect private premises has to be properly reasoned, with a focus on the reasons for the existence of “reasonable suspicion”, purpose of the inspection, as well as the person’s right to appeal to the Court of Justice.  Furthermore, the subject matter of the investigation has to be specified.  The latter, as a consequence, excludes the so-called “fishing expeditions” and limits this investigative power of the Commission only to the cases in which it knows exactly what evidence it is trying to obtain from the private premises.  Finally, in order to enter any private premises the Commission has obtain the warrant from the competent national court before starting the dawn raid.

As it can be seen, the Commission seeks to add the new investigative tool with regards to the investigation of “private premises”.  Despite the fact that it has to comply with a number of demanding rules in order to execute the investigation of private premises during dawn raids, in substance, the new tool will only reinforce the controversial character of already broad investigative powers of the Commission.

Namely, the aim of the right to privacy provided by Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (the “Convention”) is to ensure a full respect of private and family life, home, and correspondence of any person or private entity.  According to the European Court of Human Rights (the “Court”), a public authority’s interference with this right is permitted only when if it is prescribed by law, pursues the legitimate aim and is necessary in the democratic society.

However, it is questionable whether the Commission’s intended power to investigate individual social network accounts can fulfill necessary conditions in order to be regarded as permitted under the Convention.  Since the wording of the Regulation does not mention the right to examine individual social network accounts, but only the means of transport, land or premises, it cannot be stated that the measure is prescribed by law.  Further, one can doubt that the Commission could find books or other records in relation to business on social network accounts as the sole form of data that justifies its entrance on private premises.  It can be guessed that the Commission would be targeting specific communications that can lead to the conclusion that cartels are agreed upon using a particular social media platform.  However, that would seriously infringe the legitimate expectations of those directors or board members that their personal communications are private.

Although free competition is a legitimate aim which protects “economic well-being of the country”4, it usually appears vis-a-vis other protected fundamental rights of the individuals. When that is the case, the proper balancing between these rights and freedoms needs to be applied and there has to exist a great number of tangible reasons that allow for the consideration of whether the economic well-being of the country can justify the infringement of an individual’s right to privacy. Nonetheless, it remains to be seen whether the Commission will apply such balancing and provide compelling evidence for the infringement of one’s right to privacy.



1 See Article 21 of COUNCIL REGULATION (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003R0001&from=EN 
2 See Article 21 of COUNCIL REGULATION (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003R0001&from=EN
3 In particular, Articles 101 and 102 of the Treaty on the Functioning of the European Union.
See case Sociéte Colas Est and Others v France  [2002] ECHR