The competence of the Slovak Antimonopoly Office to conduct dawn raids is governed by Article 22a of Slovakia’s Act No 136/2001 Coll. on Protection of Competition.
While Act No 136/2001 (the “Act”) sets a general framework for the conduct of dawn raids, its interpretation has in previous years been subject to judicial review – with some interesting outcomes.
Authorization to Conduct Dawn Raids Must Be Specific
Besides setting out certain formal requirements, the Act generally requires that dawn raids be based on authorization issued by the Antimonopoly Office (PMU), outlining its subject and purpose.
Adhering to the decision-making practice of the Court of Justice of the European Union, the Supreme Court of the Slovak Republic addressed the issue of the subject-matter content of the authorization in its landmark 2015 decisions in relation to the bid-rigging case brought against the Datalan company.
In those decisions, and in order to limit “fishing expeditions,” the Court presented a more detailed list of the requirements necessary for authorization. The authorization must contain a description of basic characteristic features of the alleged delict, designation of the affected market, nature of the alleged restrictions and explanations from which the serious indications as to the delict assessed have arisen (along with a general description of their type and nature), as well as serious material indications on which the suspicion against the relevant undertaking is based.
The authorization should also contain a description of the manner in which the delict was allegedly perpetrated and, to the extent possible, a specific designation of what the dawn raid seeks to discover. The PMU is also asked to prove that carrying out the dawn raid is necessary for the collection of evidence attesting to the perpetration of the delict.
The Rights of Undertakings (and Their Employees) During a Dawn Raid
In its Datalan saga, the Court also touched upon the requirements for the PMU during the execution of a dawn raid. First, the PMU is obliged to exercise maximum effort to use the legal time period provided for the conduct of the dawn raid in order to separate any irrelevant (personal) data and to collect and process only the data necessary for the conduct of the inspection. Since, in the Datalan case, the PMU decided to end the dawn raid four days before the deadline set out in the authorization, it could not invoke time pressure as an excuse to separate unnecessary data later on in its premises (as was the usual practice before the decision).
Second, the Court also ruled, regarding the PMU’s entitlement to inspect private devices of employees of the inspected undertaking used for professional purposes, that this inspection has to be performed within the limits of proportionality. In effect, the PMU must be able to clearly identify and communicate (both to the undertaking and to the affected employees) the necessity of inspection.
The Datalan case wasn’t the only opportunity for the Court to consider dawn raids – it also dealt with a number of other questions relevant for the proper conduct of dawn raids in the case of AT Computer. First, while the Court in that case did not find a specific obligation of the PMU to inform the undertakings about their right to have their legal counsels present, it seemed to implicitly confirm that obligation’s existence.
Second, the Court ruled that while the PMU is entitled to ask employees of the inspected undertaking for explanations, these questions have to be limited to the purpose of the inspections itself (e.g., how and where to find certain documents, etc.) and cannot relate to the (as yet un-initiated) administrative proceedings on the merits (e.g., questions about different business strategies). Moreover, the employees may not be interviewed at the same time as their personal computers are being inspected, which would effectively deprive them of the opportunity to object to the private or irrelevant content of the communication being reviewed.
The Future of Dawn Raids in Slovakia
While we have seen a considerable improvement in delineating the boundaries of the PMU’s competence during the last decade, the legal terrain establishing its rights to conduct dawn raids is far from stable. For instance, we still lack compelling judicial authority on the PMU’s common practice of prohibiting an inspected undertaking from contacting its external legal counsels based on a fear of thwarting the inspection.
Nonetheless, recent developments in the case law on dawn raids provide undertakings with more lines of defense and bring some legal certainty into the (still) young and vibrant practice.
By Jakub Jost, Leader of Antitrust and Competition, Peterka & Partners Slovakia
This Article was originally published in Issue 5.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.