ECHR determines that antitrust inspections at company’s premises by competition authorities are subject to judicial authorisation

The European Court of Human Rights, in the case Delta Pekárny a.s. vs. the Czech Republic, registered under application No. 97/11, by ruling of 2 October 2014¹, condemned the Czech Republic for breach of Article 8 of the European Convention on Human Rights (ECHR), regarding the right to respect for private and family life, home and correspondence².

The applicant company before the European Court of Human Rights, Delta Pekárny a.s., is a limited company under Czech law with its registered office in Brno (in the Czech Republic).

This case appraised by the Strasbourg Court concerned an inspection carried out at the referred company’s premises on 19 November 2003 in the context of administrative antitrust proceedings which were opened by the Czech National Competition Authority (NCA) on the same date and concerned an alleged breach of competition rules by the company.

According to the NCA’s inspection report, the grounds for and purpose of the search at the premises were to examine documents in the context of those administrative proceedings. During the inspection NCA officials obtained access to certain letters from the company’s representatives and, according to the report, were provided with copies of several documents. The applicant company was subsequently fined for refusing to allow an in-depth examination of its business data. Further, it judicially challenged the NCA decision, arguing, among other points, that the NCA carrying out an inspection without having received prior judicial authorisation was contrary to domestic law and to the ECHR. All of the appeals lodged by the applicant company in the Czech jurisdiction, including a constitutional appeal in 2009, were dismissed.

The applicant company before the European Court of Human Rights claimed in particular that the executed inspection of its premises without any ex ante judicial supervision had amounted to a breach of its rights as protected by Article 8 of the European Convention on Human Rights. In this setting, the Czech Government sustained in the proceedings before the European Court that the domestic legislation (indirectly establishing in its motion a parallelism with Article 20 of EC Regulation 1/2003³, regarding the European Commission’s powers in the setting of companies’ inspections) allowed the inspection to be carried out without any prior judicial authorisation, thereby granting the NCA the power to access and review the company’s business documents.

The European Court of Human Rights in a October 2014 judgement establishes that absence of prior judicial authorisation for the NCA inspection and, as a consequence, lack of effective judicial control of the necessity of inspection measures do not offer adequate guarantees against arbitrariness; thus considered such administrative interference in the applicant’s right as disproportionate vis-à-vis the aim pursued by the NCA and, therefore held that Article 8 of the European Convention on Human Rights had been breached by the Czech Republic.

This judgement is particularly relevant, as it indirectly signals that EC Regulation 1/2003, maxime Article 20, which grants the European Commission the power to conduct inspections at company’s premises without any prior judicial control, can be deemed incompatible with the European Convention. Further, and as since the entry into force of the Lisbon Treaty, which provides in Article 6 that Fundamental Rights, as guaranteed by the European Convention on Human Rights, constitute general principles of European Union law, Article 20 of EC Regulation 1/2003 should be modified by the European legislature, de jure establishing an ex ante judicial control on companies inspections performed by the European Commission.

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