Dawn Raid Guide: Antitrust authorities

The antitrust authorities in Germany have the task of detecting and prosecuting competition law infringements. In Germany these tasks are carried out by the Federal Cartel Office, the Regional Competition Authorities – and the EU Commission if cross-border matters are involved. If there is sufficient indication for the existence of competition law infringements the antitrust authorities can, in certain circumstances with the assistance of the police, carry out (unannounced) dawn raids at the premises of undertakings suspected of participating in a cartel, and sometimes even at the premises of third parties which are not involved. The purpose of the dawn raid is to investigate circumstances suspected of being in breach of antitrust law by finding and securing evidence. The authorities can, for example, search physical files, IT systems, archives and individual workstations. Searches usually begin in the early morning, which is why they are referred to as dawn raids, and can last for several days.

Contacts

Alexander Birnstiel, LL.M. (College of Europe)

Rechtsanwalt (Lawyer)
T +49 89 28628241
Peter Stauber, LL.M.

Rechtsanwalt (Lawyer)
T +49 30 20942175

EU COMMISSION

What can you do? What are you allowed to do? What should you avoid doing?

1. NOTIFICATION

Ensure that you notify the following persons directly after the arrival of the officials:

Management Board and if applicable:
the Head of the Legal Department and
your company’s Compliance Officer.

Contact the Noerr Dawn Raid Team. It is advisable to name one of the specified persons to the officials as coordinator and contact person, especially if assistance from external lawyers is not to be expected at short notice.

2. IDENTITY AND AUTHORISATION CHECKS

Check the identity of the officials on the basis of their official ID cards and note their names and functions. Also check their authorisation in the form of the official decision of the authority or the court order which is the basis for the search.

Check the official decision of the authority on the basis of which the officials wish to carry out the search.

Is it a binding inspection decision?
- An inspection decision exists if the reference is made in the Commission’s decision to Article 20 (4) of Regulation 1/2003. Please note that the company is under an obligation to submit to the inspection carried out by the European Commission. This obligation only applies, however, to the extent that employees or the company do not incriminate themselves.
- The officials may enter the company premises, review business records and request information.
- You are obliged to tolerate the officials entering offices.
  The officials do not at the same time have to be in possession of a search warrant issued by a German court.
Or is it a written authorization?
- A written authorization exists if reference is made in the Commission’s decision to Article 20 (3) of Regulation 1/2003.
- You are not obliged to tolerate the inspection measures.
- You can refuse entry to and the searching of offices without specifying reasons and without the risk of sanctions.
- Should you consent to the inspection measures, however, you are obliged to hand over all requested documents in full and not to provide any incorrect or misleading information!

Further details on the scope of search rights can be found in the section “What are officials allowed to take with them?”

The officials must give you a certified copy of the inspection decision or the inspection request, receipt of which you have to confirm. Fax this document to:

the Management Board and if applicable:
the Head of the Legal Department
your company’s Compliance Officer and
the Noerr Dawn Raid Team.

Do not initially answer any questions on the subject of the inspection, but carry out preparations for the search. Information on this can be found in the section "Correct preparation".

3. CORRECT PREPARATION

Wait for your legal counsel

Ask the senior investigating official to wait until your legal counsel – representatives of the Legal Department or a member of the Noerr Dawn Raid Team – has arrived.

The officials are often willing to wait for a certain time if they are allowed to move freely in the meantime and can already carry out measures to secure evidence, such as sealing offices or filing cabinets and they are assured that no documents will be secreted away or hidden. Please note that the officials are not in principle obliged to meet this request and to wait. The situation is different for an inspection based on a written authorization, because in this case the company is not subject to any obligation to tolerate the search.

If the officials are willing to wait, ask them to wait in a separate room, where they do not have any direct access to physical or electronic documents and cannot overhear any discussions.

Determining the subject of the inspection

Read the decision of the authority/court on the basis of which the officials wish to carry out the search in detail and check the following points:

Which enterprise, operating divisions or business units of your company are affected?
What period does the inspection refer to?
What offence is the company accused of?
How long is the search intended to last?

If the official/court decision does not contain any such information concerning the above items, request appropriate information from the senior investigating official. Ask the senior investigating official how the officials wish to proceed with the search. Request the officials to treat business secrets confidentially.

Please make a note of all answers the officials give to your questions.

Shadowing – Accompanying the officials

You may and should accompany the officials during the search.

If possible, ensure that every official or every search team is accompanied by an employee of your company. This is not only in the interest of the company, but also facilitates a smooth and rapid search for the officials because they are being accompanied by people who can answer questions.

If possible at least two people should accompany the officials:

Manager/executive (e.g. for questions regarding the company or its business divisions);

Assistant (for taking notes and providing support).

Give the employees the following instructions:

Note down all questions the officials ask and your answers to these.
Make a note of which rooms are accessed and which documents are inspected.
Make, if possible, at least two copies of each document which the officials copy or seize: one copy for your company and an additional copy for your legal counsel.

Ensure that sufficient IT Department employees are available to provide the officials with quick access to the desired files and make them copies of the data storage media (e.g. copies of USB sticks and hard drives).

Room for inspecting documents

Offer the officials the use of a separate room to which all requested documents can be brought for inspection.

If the officials agree to this, ensure that the room has at least one photocopier. Make a note of which documents are requested. If documents or computers are seized, ask the officials for permission to make copies of the documents or hard drives before these are seized.

Please note that the officials are not obliged to accept the offer of separate inspection room.

Internal communication

Inform all employees at your company location that a search is being carried out by the antitrust authorities. Send out a circular in this regard by email or at smaller sites inform employees by loudspeaker announcement. At larger sites please inform the heads of the individual departments and ask these to inform their department employees accordingly.

Emphasise the following in such internal notification:

All employees must in principle cooperate with the officials.
Questions regarding personal information (first name, last name and maiden name, place and date of birth, marital status, place of residence/domicile and nationality) have to be answered.
Questions regarding the company, it business activities and specific circumstances are to be referred by employees to their line managers.
Employees may not under any circumstances destroy or hide documents, or delete any emails.
Employees must treat the fact that a search is being carried out confidential and must not in particular allow any information to be disclosed externally (e.g. to customers, competitors, journalists, family members or other third parties).

4. WHO AND WHAT MAY BE SEARCHED?

Rooms and documents at the company

The following rooms, objects and persons may in principle be searched by the officials of the European Commission:

Buildings and premises which belong to the company or are used by it,
desks, cabinets, file archives,
business documents such as files, business records, internal and external (also electronic)correspondence, file and telephone memos, diaries, accounting records, in particular expenses reports,
company cars (even if these are also used privately),
briefcases, laptops, diaries, address books and handheld computers,
data on the company’s servers,
persons on the company site.

What are officials not permitted to inspect?

Documents of a purely private nature,
Documents and objects (e.g. vehicles) which belong to third parties not associated with the company.

Certain special rules apply to correspondence with lawyers:

Internal correspondence with the legal department of your company may be inspected and seized by the officials.
A differentiation is to be made with respect to correspondence with external lawyers:
- Any correspondence with external lawyers prior to the start of the investigation (e.g. legal opinions, results of compliance investigations) is protected from being accessed by the officials.
- Internal company documents prepared exclusively for correspondence with external lawyers are also protected.
Mark correspondence with external lawyers as “Legally Privileged”/Attorney-Client Privileged”.
If in doubt, ask your legal department or your legal counsel whether documents are deemed protected before handing these over to the officials.
If only part of the document is protected, black out this part before handing over the document to the officials. Inform the officials why this part of the document has been blacked out.
Please note that the officials do not have the right to carry out any “cursory examination” of the documents to determine whether these are actually protected.
If the officials insist that the documents are handed over, seal the documents in an envelope marked “legally privileged documents – inspection by authorities is only permissible with a court decision”.

Rooms and documents outside the company

European Commission officials may only then access rooms not belonging to the company if this has been ordered by an inspection decision and the corresponding approval of a German court has been presented.

5. ACCOMPANYING THE OFFICIALS

The officials are in principle only entitled to access rooms. The company is, however, obliged to present the business documents requested by the officials.

If the officials agree, all requested documents should be brought to them in a separate room. If the officials disagree with this procedure, each official or inspection team should be accompanied by company employees.

6. WHAT ARE OFFICIALS PERMITTED TO TAKE WITH THEM?

The officials do not have the right to seize original documents or take these with them. They do, however, have the right to make copies of them and take those with them.

If the documents contain business secrets, mark these with “Confidential/Business Secrets”. If the documents are incomplete, explain the reason for this to the officials and assure them that the documents will be supplemented without undue delay and copies then submitted.

Sealing of rooms

The officials may request such a large amount of documents that is impossible to inspect these in one day. In this case, the documents are usually secured in a separate room on the company premises and the inspection is continued on the following day. The storage room is then sealed.

Make sure that no one attempts to gain access to such rooms once they have been sealed because any breach of the seal can be penalised with a fine. Ensure with clear warning signs and if necessary a security employee that no one attempts to gain access to the room and the seal is not damage (e.g. by cleaning staff). Merely locking the door is not sufficient.

7. ANSWERING QUESTIONS

As a general rule, you should first of all clarify every time with your legal counsel from the legal department or the Noerr Dawn Raid Team whether, to what extent and in what way a question has to be answered.

The officials of the European Commission have the right to facts or documents relating to the subject of the inspection.

You therefore have to answer questions concerning the location of documents or which arise specifically from the records or business documents inspected by the officials (e.g. on the meaning of initials on documents or internal company abbreviations, about the position of certain people at the company).

You have the right not to incriminate the company. Offer the officials a written response to questions which are difficult. Make a note of the specific questions. Consult you legal department or the Noerr Dawn Raid Team before submitting your answers.

Restrict your statements to what is absolutely necessary (short, objective and precise). Do not speculate if you are unsure how a question should be answered correctly. If in doubt, answer the question with “I don’t know”.

Make a note of all questions asked and the answers you give to these

8. WHAT IS TO BE NOTED WITH RESPECT TO IT?

The officials may copy electronic data storage media or demand that the content is printed out and handed over.
The officials are generally not permitted to seize the data storage media themselves and to take these with them.

9. WHEN THE SEARCH ENDS

During a final meeting with the officials of the EU Commission, sometimes at the end of every day, an inventory of copied documents will be made.

Compare this inventory with your own records and ensure that all documents which have been copied, have been recorded. If anything is missing, do note it now.

Collect all protocols prepared during the dawn raid and all inventories of copied documents and make copies of them for

the Management Board and if applicable:
the Head of the Legal Department
your company’s Compliance Officer
the Noerr Dawn Raid Team.

If the search lasts longer than one day, the officials will seal the documents to be inspected in a room. Ensure with clear warning signs and if necessary a security employee that no-one attempts to gain access to the room and the seal is not damage (e.g. by cleaning staff). Merely locking the door is not sufficient.

If appropriate, prepare a press release. Agree on the wording of the press release with your legal counsel.

FEDERAL CARTEL OFFICE; REGIONAL COMPETITION AUTHORITIES

What can you do? What are you allowed to do? What should you avoid doing?

1. NOTIFICATION

Ensure that you notify the following persons directly after the arrival of the officials:

Management Board and if applicable:
the Head of the Legal Department,
your company’s Compliance Officer.

Contact the Noerr Dawn Raid Team. It is advisable to name one of the specified persons to the officials as coordinator and point person, especially if assistance from external lawyers is not to be expected at short notice.

2. IDENTITY AND AUTHORISATION CHECKS

Check the official/court decision on the basis of which the officials wish to carry out the search.

Is it a:

Search warrant/seizure order of a German court?
- You are obliged to tolerate the entering of the offices and independent search by the officials.
- The obligation to tolerate only applies for the companies and rooms as specified in the order.
- Therefore check exactly which company and which rooms are specified in the order.
Or an order of a Decision Division of the Federal Cartel Office or a regional competition authority of a Federal State?
- You are obliged to tolerate the entering of the offices.
- An independent search by the officials and the seizure of documents is only permissible if the senior investigating official orders a search due to imminent danger.
- If such an order is not given, you are only obliged to bring the requested documents to the officials.

Further details on the extent of the search rights the officials can be found in the section “What are officials permitted to take with them?”

Ask for a copy of the order and fax this document to:

the Management Board,
the Head of the Legal Department,
your company’s Compliance Officer,
the Noerr Dawn Raid Team.

Do not initially answer any questions on the subject of the inspection, but carry out preparations for the search. Information on this can be found in the section "Correct preparation" .

3. CORRECT PREPARATION

Wait for your legal counsel

Ask the senior investigating official to wait until your legal counsel – representatives of the Legal Department or a member of the Noerr Dawn Raid Team – has arrived.

The officials are often willing to wait for a certain time if they are allowed to move freely in the meantime and can already carry out measures to secure evidence, such as sealing offices or filing cabinets and they are assured that no documents will be secreted away or hidden. Please note that the officials are not in principle obliged to meet this request and to wait.

If the officials are willing to wait, ask them to wait in a separate room, where they do not have any direct access to physical or electronic documents and cannot overhear any discussions.

Determining the subject of the inspection

Read the decision of the authority/court on the basis of which the officials wish to carry out the search in detail and check the following points:

Which enterprise, operating divisions or business units of your company are affected?
What period does the inspection refer to?
What offence is the company accused of?
How long is the search intended to last?

If the decision of the official/court does not contain any such information, request appropriate information from the senior investigating official. Ask the senior investigating official how the officials wish to proceed with the search. Request the officials to treat business secrets confidentially. Please make a note of all answers the officials give to your questions.

Shadowing – Accompanying the officials

You may and should accompany the officials during the search.

If possible, ensure that every official or every search team is accompanied by an employee of your company. This is not only in the interest of the company, but also facilitates a smooth and rapid search for the officials because they are being accompanied by people who can answer questions.

If possible at least two people should accompany the officials:

Manager/executive (e.g. for questions regarding the company or its business divisions);
Assistant (for taking notes and providing support).

Give the employees the following instructions:

Note down all questions the officials ask and your answers to these.
Make a note of which rooms are accessed and which documents are inspected.
Make, if possible, at least two copies of each document which the officials copy or seize: one copy for your company and an additional copy for your legal counsel.

Ensure that sufficient IT department employees are available to provide the officials with quick access to the desired files and make them copies of the data storage media (e.g. copies of USB sticks and hard drives).

Room for inspecting documents

Offer the officials the use of a separate room to which all requested documents can be brought for inspection.

If the officials agree to this, ensure that the room has at least one photocopier. Make a note of which documents are requested. If documents or computers are seized, ask the officials for permission to make copies of the documents or hard drives before these are seized.
Please note that the officials are not obliged to accept the offer of separate inspection room.

Internal communication

Inform all employees at your company location that a search is being carried out by the antitrust authorities. Send out a circular in this regard by email or at smaller sites inform employees by loudspeaker announcement. At larger sites please inform the heads of the individual departments and ask these to inform their department employees accordingly.

Emphasise the following in such internal notification:

All employees must in principle cooperate with the officials.
Questions regarding personal information (first name, last name and maiden name, place and date of birth, marital status, place of residence/domicile and nationality) have to be answered.
Questions regarding the company, it business activities and specific circumstances are to be referred by employees to their line managers.
Employees may not under any circumstances destroy or hide documents, or delete any emails.
Employees must treat the fact that a search is being carried out confidential and must not in particular allow any information to be disclosed externally (e.g. to customers, competitors, journalists, family members or other third parties).

4. WHO AND WHAT MAY BE SEARCHED?

Rooms and documents at the company

The following rooms, objects and persons may in principle be searched by the officials of the Federal Cartel Office:

Buildings and premises which belong to the company or are used by it,
desks, cabinets, file archives,
business documents such as files, business records, internal and external (also electronic) correspondence, file and telephone memos, diaries, accounting records, in particular expenses reports,
company cars (even if these are also used privately),
briefcases, laptops, diaries, address books and handheld computers,
data on the company’s servers,
persons on the company site.

What are officials not permitted to inspect?

Documents of a purely private nature,
Documents and objects (e.g. vehicles) which belong to third parties not associated with the company.

Certain special rules apply to correspondence with lawyers:

Internal correspondence with the legal department of your company may be inspected and seized by the officials.
A differentiation is to be made with respect to correspondence with external lawyers:
- Correspondence prepared for defence in ongoing proceedings is protected from being accessed by the officials.
- Mark correspondence with external lawyers as “Legally Privileged”/Attorney-Client Privileged”.
If in doubt, ask your legal department or your legal counsel whether documents are deemed protected before handing the over to the officials.
If only part of the document is protected, black out this part before handing over the document to the officials. Inform the officials why this part of the document has been blacked out.
Please note that the officials do not have the right to carry out any “cursory examination” of the documents to determine whether these are actually protected.
If the officials insist that the documents are handed over, seal the documents in an envelope marked “legally privileged documents – inspection by authorities is only permissible with a court decision”.

Rooms and documents outside the company

Federal Cartel Office officials may only then search rooms (e.g. private homes), objects (e.g. briefcases, cars) and persons not belonging to the company if such a measure is covered by the court search warrant and seizure order or an order issued by the Decision Division of the Federal Cartel Office.

5. ACCOMPANYING THE OFFICIALS

The officials are in principle entitled to search all rooms, objects and persons themselves.

Each official or inspection team should be accompanied by company employees.

6. WHAT ARE OFFICIALS PERMITTED TO TAKE WITH THEM?

Federal Cartel Office and regional competition authorities of Federal States are permitted to seize original documents and data storage media. The officials are not obliged to permit the company to make copies of the documents seized. In the event of a cooperative search, however, the copying of documents which are relevant for current business operations is often at any rate permitted. In the interest of a rapid termination of the search, you should, if applicable, not ask to copy older documents which are not necessary for current business operations.

You are not obliged to hand over the passwords required to access data storage media and computers. If, however, the company has decided to cooperate with the antitrust authority, it is advantageous to facilitate targeted action by the officials by providing such information and thus to reduce the risk of hardware being seized (hard drives, laptop, servers).

It can also be beneficial to inform the officials where the documents covered by the subject of the search warrant are located. The risk of comprehensive seizure and therefore “chance discovery” can as a result be reduced.

IMPORTANT: Never give your consent to the seizure of documents or objects because otherwise your company loses formal rights of defence. You should therefore explicitly object to each seizure because the seizure then requires a court order. Record your objection in writing.

Please note that in the event of imminent danger such a seizure order can also be issued ad hoc by the senior investigating official. If, however, you have objected, the order has to be subsequently reviewed and confirmed by a court.

Sealing of rooms

The officials may request such a large amount of documents that is impossible to inspect these in one day. In this case, the documents are usually secured in a separate room on the company premises and the inspection is continued on the following day. The storage room is then sealed.

Make sure that no one attempts to gain access to such rooms once they have been sealed because any such breach of the seal can be penalised with a fine. Ensure with clear warning signs and if necessary a security employee that no one attempts to gain access to the room and the seal is not damaged (e.g. by cleaning staff). Merely locking the door is not sufficient.

7. ANSWERING QUESTIONS

As a general rule, you should first of all clarify every time with your legal counsel from the legal department or the Noerr Dawn Raid Team whether, to what extent and in what way a question has to be answered.

Questions regarding personal information (first name, last name and maiden name, place and date of birth, marital status, place of residence/domicile and nationality) have to be answered. Any violation of this can be punished with a fine.

You do not have to answer questions regarding the accusations and the facts. You have the right to remain silent. The authority can then make a written request for information and, if appropriate, subpoena you as a witness.

If the officials nevertheless insist on an answer, state explicitly that you are only answering on the condition that a (prior) written request for information is made.

Restrict your statements to what is absolutely necessary (short, objective and precise). Do not speculate if you are unsure how a question should be answered correctly. If in doubt, answer the question with “I don’t know”.

Make a note of all questions asked and the answers you give to these.

8. WHAT IS TO BE NOTED WITH RESPECT TO IT?

Federal Cartel Office and Regional Competition Authority officials can provisionally seize electronic data in order to inspect these later on the authority’s premises. The officials do not have to search for individual documents on site.
The officials are permitted to seize electronic data storage media (e.g. hard drives, USB sticks, CD-ROMs).
Please note that the analysis of the data storage media can – depending on the amount – take between six and twelve months. You should therefore offer to make copies of the hard drives and other data storage media for the officials because the functionality of the company can otherwise be adversely affected.

9. WHEN THE SEARCH ENDS

During a final meeting with the officials of the Federal Cartel Office a record of the dawn raid and an inventory of seized documents will be made.

Compare these documents with your own records and ensure that all documents and objects which have been inspected and seized, the questions asked by the officials and the answers given to these have been recorded. If anything is missing, do note it now.

Collect all protocols prepared during the dawn raid, all official records and he inventory of seized documents and make copies of them for

the Management Board and if applicable:
the Head of the Legal Department
your company’s Compliance Officer
the Noerr Dawn Raid Team.

If you have not already done so, explain explicitly that you object to the seizure of the documents and objects. Ensure that the officials record the objection.

If the search lasts longer than one day, the officials will seal the documents to be inspected and the documents which have been seized in a room. Ensure with clear warning signs and if necessary a security employee that no-one attempts to gain access to the room and the seal is not damage (e.g. by cleaning staff). Merely locking the door is not sufficient.

If appropriate, prepare a press release. Agree on the wording of the press release with your legal counsel.