Procopé & Hornborg competition blog: Amendments to Dawn Raid procedures in Finland
07.06.2019 | By Lotta Uusitalo
According to the Finnish Competition Act, the Finnish Competition and Consumer Authority (“FCCA”) can conduct unannounced inspections (so-called dawn raids) at a company’s premises in order to investigate competition restrictions.
In spring 2019 the Finnish Parliament passed a government bill (HE 68/2018) bringing two changes to the Competition Act as concerns dawn raid procedures. The first amendment enables the FCCA to continue a dawn raid inspection at its premises (so-called continued inspection). The second amendment clarifies that the investigative powers of the FCCA is independent of the storage medium. ¹ The amendments shall come into force 17.6.2019.
Already prior to the amendment, the FCCA has offered companies under investigation a possibility to continue an inspection at other premises than the premises of the company, for instance at a legal counsel’s office. As a result of the amendment, instead of being a voluntary choice of a company, the FCCA has a discretion to decide on the necessity of the continued inspection at the authority’s premises and it is presumed that – save for very short inspections – most dawn raids will be continued at the FCCA’s premises.
Currently, the FCCA has not yet taken action to issue any further details on the continued inspections such as updating its dawn raid brochure dating back to 2017. What we do know is that if the selection of documents relevant for the investigation is still at progress at the end of the on-site inspection at the company’s premises, temporary copy of data would be made at the company’s premises of the relevant material which is then transported to the FCCA’s premises. The temporary copy could contain personal documents, legal professional privilege documents and documents not included in the scope of the investigation. What we also know is that the FCCA would have a duty to destroy temporary copies immediately upon completion of the inspection by a reliable method.
Questions that remain open are the FCCA’s stance and future practice on whether the temporary data would be sealed for the transportation so that the seal would later be opened at the FCCA’s premises together with the company’s representative. Also undetermined is the question if the company under investigation shall receive a data carrier on which all the temporary data is stored.
The FCCA’s officials conducting an inspection are empowered to examine the relevant business correspondence, bookkeeping, computer files, documents, and data of a company. The second abovementioned amendment to the Competition Act concerning the storage medium is a clarification to an existing practice that has been followed from 2016 at least concerning mobile phones. In practice, the inspection power now includes the complete IT-environment, e.g. servers, desktop computers, laptops, tablets and other mobile devices, and all storage media such as CD-ROMs, DVDs, USB-keys, external hard disks, backup tapes and cloud service.
Two noteworthy issues are worth mentioning as to the search of mobile devices: the first is that mobile devices contain a vast amount of private information and that the privacy question in Finland is somewhat peculiar: electronic messaging such as e-mails, also business e-mails, are private from an employer. The employer company can only access or read its employees’ work messages in very limited circumstances related to the absence of an employee. This means that an undertaking in Finland could not conduct a full-blown audit itself or a mock dawn raid without trespassing the right to privacy of communication – even consent given by the employee might be void. Personal messaging are private from all, also from the FCCA. This mix creates interesting situations at dawn raid procedures. The FCCA basically has wider power to access and read electronic messaging than the company under the investigation.
The second noteworthy issue would be a personal mobile device: the wording of the Competition Act refers to investigative rights to “undertaking’s data” irrespective of the storage medium. ² So what happens if you bring your private device for work or if the company has a Bring Your Own Device Policies?
Phones contain a highly sensitive personal content, but, however, seldom work-related content that would not be available from other devices, such as computers. Thus, in some cases, the examination of phones might be questionable in light of principle of proportionality, since the benefit of the conduct to the authority in relation to the protection of the privacy of an individual could be insignificant, if not even non-existent.
The issues of privacy and legitimacy of the inspections are likely to remain open as noticeably, in Finland there is no direct access to judicial review: there is a prohibition against appeal of the inspection decision itself and the inspection decision and the measures taken during an inspection may be appealed only in case proceedings are filed at the Market Court against the undertaking concerned.
¹ Further amendments to the Competition Act are not dealt herewith.
² The Commission has noted in its Explanatory Note on Commission inspections pursuant to Article 20(4) of Council Regulation No 1/2003 that Commission’s inspectors may search “private devices and media that are used for professional reasons when they are found on the premises”. Currently, the FCCA’s brochure does not include any other note on privacy questions – other than a reminder addressed to the undertakings or it’s representative not to unjustifiably read employees own material during or after the inspection.
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