Dawn raid's illegality does not automatically void subsequent request for information

Illegal dawn raids
Two-step purification: origin of data and indispensability of dawn raid
Documents transferred in response to request for information
Effect on infringement decision and fine

On 7 October 2020 the Market Court of the Brussels Court of Appeal ruled in a case involving Belgian telecoms operator Proximus (formerly Belgacom), which had been ongoing for more than a decade. In this latest judgment, the Market Court ruled on the effects of a dawn raid's illegality and confirmed the two-step test for determining the same.

Illegal dawn raids

Following a 2005 complaint by telecoms competitor Base, the Belgian Competition Authority (BCA) performed dawn raids in January 2006 at Proximus's premises, seeking evidence of an alleged abuse of dominance in the form of a margin squeeze. Based on the data gathered during the dawn raids and in the course of the following investigation, including requests for information, the BCA imposed a €66.3 million fine on Proximus.

Proximus challenged the BCA's decision, claiming that the dawn raids had been illegal. While the dawn raids had been performed in accordance with the then applicable Law on the Protection of Economic Competition 1999, that law simply provided that inspectors had to carry out a mission order issued by the BCA's Auditorate to perform a dawn raid. In line with an April 2018 Court of Cassation judgment on a similar issue, the Market Court (in an interim judgment of 9 October 2019) found that, in the case at hand, the dawn raids performed at Proximus's premises in January 2006 had been illegal as they had not been authorised by a judge and because there had been no a posteriori judicial control. Therefore, the Market Court ordered:

• the data collected during the illegal dawn raid to be removed from the case file; and
• the parties to take a position on the effects of the exclusion.

Two-step purification: origin of data and indispensability of dawn raid

In the 7 October 2020 interim judgment, the Market Court confirmed and clarified its earlier case law on how to purify a case file after an illegal dawn raid. According to the Market Court, the following two-step test should be applied:

• Where does the data come from? There are three possibilities:
  • If the data does not originate directly or indirectly from the dawn raid, such data can remain in the case file.
  • If the data originates directly from the dawn raid, such data should be removed from the case file and can no longer be used.
  • If the data originates indirectly from the dawn raid, the below second question should be asked.
• If the data originates indirectly from the dawn raid, it should be considered whether the dawn raid was indispensable to obtain access to the data:
  • If the dawn raid was not indispensable as the same data could have been collected in a different way, the data can remain in the case file.
  • If the dawn raid was indispensable as the same data could not have been collected in a different way, the data should be removed from the case file and can no longer be used (eg, in a statement of objections or a subsequent decision).

Notably, the Market Court explained that this two-step purification must be performed only with respect to the data referred to in the BCA's infringement decision. The assessment of the 'purified' decision's validity can be done only on the basis of the evidence referred to in the decision that did not have to be removed from the case file. Therefore, it is impossible for the parties to build new arguments based on any information that was not originally referred to in the decision, but that was in the case file and would theoretically survive the two-step test.

Documents transferred in response to request for information

The Market Court found that the data regarding Proximus's 2004 costs came from documents obtained during the dawn raid. Thus, as this data originated directly from the dawn raid, the Market Court ruled that it must be removed from the case file and could no longer be used. Consequently, as the facts alleged against Proximus for 2004 could no longer be established by the BCA, the BCA's decision must be partially annulled.

However, the data regarding Proximus's 2005 costs came from documents transferred to the BCA in response to a request for information following the dawn raid. Therefore, while Proximus claimed that this data indirectly originated from the dawn raid, the Market Court considered that the following two possibilities existed:

• the dawn raid had allowed the BCA to become aware of the existence of information that was until then unknown to the BCA. In this situation, the answers given in response to a request for information to obtain such data should be considered as indirectly originating from the dawn raid; or
• it was not the dawn raid which had allowed the BCA to identify the necessary data. In this situation, the answers given in response to a request for information should not be considered as indirectly originating from the dawn raid.

The Market Court considered that it was not the dawn raid at Proximus's premises which had allowed the BCA to become aware of the existence of information regarding the 2005 data. Therefore, even though the 2005 data had been transferred in response to a request for information following the dawn raid, it did not indirectly originate from the dawn raid. Moreover, the Market Court considered that, in any case, the dawn raid was not indispensable as the same data could have been collected in a different way.

Effect on infringement decision and fine

Despite the fact that the Market Court found that the BCA's decision must be partially annulled, for the year 2004, the Market Court did not order the (even partial) restitution of the fine paid by Proximus. This would require the Market Court to determine the adjusted fine for an infringement solely in 2005. However, a fine depends on several factors and therefore the fine for 2005 is not simply half the fine set for 2004 and 2005 together. Moreover, the Market Court first wants to hear the parties on their remaining pleas in this case. Consequently, the parties can now prepare their arguments on the remaining pleas and, after hearing them, the Market Court will decide whether to send the case back to the BCA for a reassessment of the fine's amount.

For further information on this topic please contact Beatrijs Gielen or Carmen Verdonck at ALTIUS by telephone (+32 2 426 1414) or email (beatrijs.gielen@altius.com or carmen.verdonck@altius.com). The ALTIUS website can be accessed at www.altius.com.