Cement companies' info request appeals
Along with unannounced inspections (dawn raids) and leniency applications, information requests form one of the main sources of information used in competition investigations and can be a major ongoing burden for companies under investigation.
Anyone who has been involved in a European Commission competition investigation (in fact, any competition investigation) will know the pain of responding to information requests: huge lists of vaguely worded and obscurely targeted questions requiring data from anywhere in the world to be assembled, reviewed and submitted within a short deadline.
Despite this – and the opportunities for caricature it affords – challenges to information requests are rare. The time and expense of responding, perhaps with a modest extension to the deadline granted by the case team, will generally be outweighed by the cost and risk of challenging the request before the EU Courts. Furthermore, many information requests are made to leniency applicants who have to maintain active cooperation with the Commission in order to secure a discount on any fine. But sometimes the Commission pushes it too far and triggers a challenge. Sometimes too those challenges are successful.
Such was the case in an investigation into suspected anti-competitive practices involving a number of companies in the cement industry including HeidelbergCement AG, Schwenk Zement KG, Buzzi Unichem and Italmobiliare.
The investigation began in 2008 and 2009 with a series of dawn raids. There followed through 2009 and 2010 a number of further informal information requests to the companies in question. In November 2010, the Commission consulted the parties on a further questionnaire which it proposed to send the parties as a formal information request by way of a "decision" of the Commission. On 6 December 2010 the Commission initiated formal proceedings against the companies. Then on 30 March 2011, the Commission issued a formal information request based on the questionnaire it had previously sent the parties in draft. The questionnaire ran to 94 pages and 11 sets of questions covering 12 Member States over 10 years. Twelve weeks were given to respond to the first 10 sets of questions and two weeks to the 11th. Various parties applied for an extension of time from 12 to 18 weeks for the first 10 sets of questions. The Commission declined the requests for extension, leading a number of parties to make applications to the EU courts seeking annulment of the Commission's 30 March information request.
At first instance, the General Court rejected the applications and upheld the Commission's information request but this ruling was overturned by the Court of Justice of the EU (CJEU) in a series of judgments of 10 March 2016.
The CJEU found that the Commission's statement of reasons in support of the request for information was "excessively vague, succinct and generic" and as a result did not allow an assessment to be made of the necessity of the requests for the purpose of the investigation. The CJEU criticised the ambiguous nature of the statement of reasons supporting which did not clearly specify which cement-related products were the subject of the investigation or the geographical scope of the investigation. The fact that the Commission had already taken a decision initiating proceedings did not assist because that decision was also expressed in vague and generic terms.
Whilst recognising that the Commission does not have to precisely define markets or identify the exact legal nature of alleged infringements when making an inspection decision – this may of course be impossible at the outset of an investigation – the CJEU clearly expects a higher degree of precision in the description of the suspected infringements in the case of information requests submitted at a later stage in an investigation, as was the case here.
These appeals are unlikely to precipitate a flood of legal challenges to Commission information requests but they do give some scope for those involved in competition investigations to push back on what seem to be unreasonably burdensome information requests.