After the Austrian Federal Cartel Authority (FCA) had some busy years in doing early morning calls ("dawn raids") in various industries, including big retailers, parts of the building industry, producers and dealers in electronics and several others, the FCA in October 2017 with some ceremony has published guidelines for such searches ("Leitfaden zu Hausdurchsuchungen").1, following a similar practice by the European Commission.
Although these guidelines do not contain big surprises as they largely reflect the law and the past practice, there are some interesting points, especially, as the Austrian legal situation in some details deviates from the European law and practice. Like other national competition authorities, the Austrian FCA can do searches not only based on Austrian cases but also for European cases.
Some points of interest:
- The FCA acts based on a court order to be issued upon request by the FCA by the Higher Regional Court Vienna acting as Cartel Court, which must be presented at the latest within 24 hours after the search. Normally, it will be handed over at the beginning of the search.
- Such court order providing for the search can be appealed within two weeks after its presentation, the modalities of the search itself can be reviewed by the Federal Administrative Court. None of these appeals suspend the search and past experience show a low success rate.
- Normally, there will be a short discussion at the beginning of the search and enterprises have the right to ask their lawyer to be present. However, the FCA will not wait to start the search until the lawyer arrives.
- The FCA has the right to search all documents or other evidence at the premises named in the court order, including electronic files. Additionally, if necessary the FCA may also seize evidence or place it under seal for the duration of the search. Breaking such seal may come quite expensive!
- Any evidence found coincidentally which is not covered by the objective as stated in the court order, must not be used for that procedure. However, it may be the basis of an extension of the court order or for a new procedure.
- Practically most important is the search of electronic files which can and will be reviewed by the FCA using special tools and experts. Just recently it was clarified that also files not physically stored on the premises but accessible for the enterprise from the premises can be subjected to a search. The enterprise under threat of fine must make access available and will be provided with a copy of any data copied by the FCA.
- Rights to object to physical documents or electronic data being copied are quite limited, normally reduced to (professional) privileges of confidentiality as provided by law. However, it is possible to require the data taken to be sealed and comment on its possible confidentiality within a deadline set by the FCA.
- Before and even during a search, enterprises have a chance to make a leniency application, which may lead to a reduced fine or the avoidance of a fine at all. However, the enterprise needs to provide the FCA with information or evidence useful to immediately prepare a statement of objections.
- One important point, although repeatedly raised by lawyers, has not been clarified in the guidelines: Under Austrian competition law it is unclear whether written lawyers' advice found in a search with the client is protected against search or seizure by the Authorities or not. Criminal procedure was amended recently to include explicitly the protection of such legal advice. In any case, the FCA repeatedly vowed to abstain from searching and has shown in the past reluctance to search, cease and/or use such legal documents found on premises searched.
It remains to be seen, if the quite extensive dawn raid activities by the Austrian Federal Cartel Authority will see a significant change by the practical implementation of these guidelines. In any case, affected enterprises may get some comfort therefrom – to the extent this is possible at all when some early morning unexpected visitors knock at their doors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.