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Brussels, 24 May 2011

Antitrust: Commission fines Suez Environnement and Lyonnaise des Eaux €8 million for the breach of a seal during an inspection

The European Commission has fined Suez Environnement and its subsidiary Lyonnaise des Eaux France (LDE) €8 million for the breach of a seal affixed by the Commission during an inspection at LDE’s premises, in April 2010, in the context of an antitrust investigation. The breach of a seal is a serious infringement of EU competition law, because this undermines the effectiveness of inspections.

Joaquín Almunia, Vice President of the Commission in charge of competition policy, said: “Inspections are a key tool in the fight against cartels as companies rarely voluntarily hand over evidence of anti-competitive practices. Even when a company does give evidence in return for immunity, the Commission must still prove the participation of others, the practices themselves and their duration. It is therefore important that companies do not break seals, which may be necessary when there is more than one office to inspect or a day is not enough."

From 13 to 16 April 2010 the Commission conducted an inspection at the premises of water management companies in France, including LDE, over suspicions of anti-competitive behaviour (see MEMO/10/134). Coming back the morning of the second day, the Commission officials found that a seal had been broken at LDE's headquarters. The Commission immediately started an investigation (see IP/10/691). LDE and Suez Environnement admitted that an LDE employee breached the seal, arguing an unintentional act

Breaches of seals are a serious infringement of competition law. The Commission however took into account the immediate and constructive cooperation of Suez Environnement and LDE, which provided more information than was its obligation, when setting the fine.

The investigation into suspected anticompetitive practices in the water and waste water markets is still on-going (see MEMO/10/134).

Background on inspections

It is common practice to seal rooms when carrying out unannounced inspections, also in the antitrust field in order to make sure that no documents are removed by the company while the inspection team is absent (e.g. over night).

Seals are adhesives made of plastic film. When they are removed, they do not tear, but show irreversible "OPEN VOID" signs on their surface. In the present case, when the inspection team returned the second day of the inspection, it found that such "OPEN VOID" signs were clearly visible on one of the seals which had been affixed on an office door the evening before.

The Antitrust Regulation (Council Regulation 1/2003, Article 23(1) (e)) provides that the Commission can impose a fine of up to 1% of a company's total turnover for a seal broken either intentionally or negligently.

This is not the first time the Commission imposes a fine for a breach of seal. In 2008, it fined E.ON Energie €38 million also for breaking a seal affixed during an unannounced inspection (see IP/08/108 and MEMO/08/61). The Commission decision was confirmed by a judgement of the General Court dated 15 December 2010 (see MEMO/10/686).

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