EU court upholds €38m fine for seal breaking in competition investigation

The Commission, which enforces EU competition law, conducted an investigation into energy companies in Germany in 2006 on suspicion that anti-competitive practices were being used.

Investigators carried out an inspection at E.ON's Munich offices in May 2006. Documents were placed in a locked room overnight and this was sealed with special stickers on which the word 'void' became visible if they were removed.

It later turned out that 20 other keys to open the room were in circulation. Inspectors found that the seal had been broken when they returned the next day. The Commission fined E.ON €38m for the breaking of the seal.

E.ON appealed to the General Court of the European Union, arguing that the fine should be reduced or wiped out. The Court backed the Commission's decision.

"The Commission was entitled in law to consider in the present case that, at the very least, the seal had been negligently broken," said a statement from the Court on the decision, which is not yet available in English. "E.ON Energie was required to take all necessary measures to prevent any tampering with the seal, having been clearly informed of the significance of the seal and the consequences of any breach."

"It is the Commission's practice to seal rooms when carrying out unannounced inspections, to make sure that no documents can be removed during the inspection team's absence (e.g. at night)," said a European Commission statement. "The objective of the use of seals is to prevent the effectiveness of inspections from being undermined. Breaches of seals are therefore serious infringements of EU competition law."

"The Commission welcomes the Court's findings, because obstructions of the Commission's investigations can severely undermine competition enforcement," said the Commission statement. "The judgement makes clear that the Commission is entitled to impose appropriate and deterrent sanctions for companies' attempts to destroy evidence in order to escape fines for antitrust infringements."

The fine is the first for the breaking of a seal, the Commission said, noting that it could fine companies up to 1% of their turnover for breaking a seal.

The Court also upheld the amount of the fine.

"The fine imposed on E.ON Energie, which amounts to approximately 0.14 % of its turnover, is not disproportionate to the infringement given the particularly serious nature of breaking a seal, the size of the company as well as the need to ensure a sufficiently dissuasive effect of the fine so as to ensure that it is not advantageous for a company to break a seal affixed by the Commission during its inspections," said the Court statement.