How to survive an unannounced inspection ‘dawn raid’ of the competition authorities?

Your phone rings at 9:04 AM on a Tuesday morning. Inspectors from the Competition and Consumer Authority (the FCCA) have arrived at your company’s lobby to perform an unannounced inspection, ie. a “dawn raid”.

The competition authorities do not announce their inspections beforehand. Inspections typically take place early in the morning and usually in the beginning of the week. In addition to company’s premises, dawn raids may be conducted in other premises as well, such as employee’s home or summer cottage.

You wonder what it’s all about. The FCCA’s inspectors tell you that they have the power to conduct inspections at whichever company to investigate whether competition rules have been breached. An inspection may derive from a complaint or anonymous tip-off made by e.g. your customer or competitor.

What happens during an inspection?

You ask the inspectors to wait for your attorney who will arrive in an hour. The inspectors however refuse to wait and announce that they will start the inspection immediately.

You let them proceed, because you remember from your compliance training that merely stalling or obstructing an inspection may result in fines. You guide the inspectors to a meeting room.

Next the inspectors ask you to contact the persons whose offices and computers they wish to inspect. The FCCA has very broad powers to inspect personnel’s offices as well as documents and devices found in the offices. However, the inspectors are not allowed to inspect correspondence between a company and its attorney. Your attorney is there to make sure that the FCCA does not inspect such documents.

May the FCCA seal premises?

The FCCA does not manage to bring the inspection to an end during that day. Therefore, they inform you that the inspection will continue the next morning. At the end of the day the inspectors seal the offices and remind you that the seals may not be broken in any circumstances.

You arrive at work early next morning to find out that the seal on the CEO’s door has been broken.  You suspect that the cleaner has not noticed the warning sign and has mistakenly broken the seal.

You explain the situation to the inspectors when they arrive. However, the inspectors tell you they’ve heard the same story before and your company will be fined for breaking the seal.

What may the FCCA ask during an interview?

During the second day the inspectors want to interview you. During the interview they ask you which competitors you have met and when. You discuss the matter openly with them.

Thereafter, the inspectors ask you details about a certain meeting. As you cannot recall everything, you reply vaguely. The inspectors are not satisfied with your response and ask you whether you and your competitor agreed on prices during the meeting. This is where your attorneys jumps in and tells the inspectors that they are not allowed to ask such questions.

How does the investigation continue?

After the on-site inspection, the FCCA will go through the material copied before reverting to your company. In practice, this means that the FCCA may request further information and finally either close the investigation or make a fine proposal to the Market Court.

Although the FCCA’s inspection may be unfounded, you have to make sure your company’s compliance guide is up-to-date and the personnel is familiar with competition rules.

Checklist for inspection: