ECJ concurs: European Commission overstepped the mark in dawn raid

The EU’s highest court has confirmed that the European Commission wrongly alerted its officials to the possibility of a further infringement outside the scope of the dawn raid decision.​

On 18 June 2015, the European Court of Justice (ECJ) followed the Opinion of Advocate General Wahl in finding that:

  • the Commission had not infringed Deutsche Bahn’s fundamental rights to privacy and judicial protection by carrying out an onsite inspection of its business premises without a prior judicial authorisation, but
  • it had infringed the company’s rights of defence when it briefed its officials on a potential further infringement by a subsidiary, outside the scope of the dawn raid decision, just before the raid took place.

For a detailed analysis of the Opinion, see our elexica article Dawn raids, fundamental rights and evidence of unlawful searches.

The case revolves around three inspections, the first carried out on Deutsche Bahn premises from 29 - 31 March 2011 into a rebate system used in connection with the supply of locomotive electricity, the second, on the basis of documents found on the first day of the first raid, into the use of infrastructure by a subsidiary, DUSS, carried out from 30 March - 01 April 2011, and a subsequent raid in July of that year, again looking for evidence of DUSS hindering access to infrastructure and offering secret rebates to DB. The issues were whether the raids had infringed Deutsche Bahn’s fundamental rights to privacy and effective judicial protection because no prior judicial authorisation had been applied for, and whether the documents triggering the second and third raids had been found by chance or not. If not, the company’s rights to defence had been infringed. The General Court had found that the additional documents which triggered the second and third raids had been found by chance, and that the rights to privacy and judicial protection had not been infringed.

The right to privacy

Article 7 of the Charter of Fundamental Rights of the European Union, and Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms establish the fundamental right to the inviolability of private premises. The General Court set out five guarantees that ensure that this right is not infringed in relation to a Commission inspection decision. The ECJ confirmed its finding, explaining that the availability of a comprehensive judicial review of the basis of the inspection, combined with the framework of Regulation 1/2003 and case law strictly defining the scope of the Commission’s powers of investigation meant that the lack of a prior judicial authorisation did not infringe this right.

The right to effective judicial protection

Nor did the lack of judicial authorisation mean that the company’s right to effective judicial protection under Article 6(1) of the ECHR was harmed. Under case law of the European Court of Human Rights, the intensity of judicial review that can be carried out and the remedies that can be imposed by the courts are key to effective protection. The EU courts carry out both a legal and factual review, and are empowered to evaluate evidence and annul a contested inspection decision where appropriate. Furthermore, the company involved can challenge the inspection decision as soon as it is notified, rather than having to wait for the outcome of the substantive investigation. The right to effective judicial protection was therefore not infringed.

The rights of defence

As to the rights of defence, however, the General court was wrong to find that the Commission had valid reasons for briefing its officials about the existence of suspicions concerning DUSS before the first inspection began. Deutsche Bahn argued that the Commission had knowingly created a risk that the information communicated would lead officials to direct their attention to documents relating to DUSS, even though these lay outside the scope of the subject matter of the decision relating to the first raid. The Court agreed. The Commission is required to state reasons for its decision ordering an inspection, and those reasons then circumscribe the powers that its officials can exercise. They can only look for documents coming within the subject-matter set out in the decision.

All background information provided to the officials must therefore relate solely to the subject matter of the inspection. The prior information provided in relation to DUSS was not part of the general background information of the case, and the lack of reference to the complaint against DUSS in the subject matter of the inspection decision meant that the Commission’s obligation to state reasons and the company’s rights of defence had been infringed. As the second and third inspections were based unambiguously in part on information gathered during the first raid, the first raid was vitiated by irregularity, and the second and third inspections should be set aside.

The judgment will have little impact in terms of the investigation against Deutsche Bahn, as the investigation has been closed, the Commission has indicated, without it relying on documents found during the second and third raids. Nonetheless, the judgment has confirmed that the Commission is entitled to look only for documents related to the subject matter of the inspection. The exception allowing it to use documents that are found purely by chance must therefore be applied narrowly, and as a matter of fundamental rights, the Courts will assess whether officials have in fact been searching for documents unrelated to the authorised search.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.