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Dawn raid by the competition authority

Sometimes, out of a misplaced sense of loyalty or fear of the consequences, staff members refuse to allow competition inspectors to enter company premises, or refuse access to requested documents and data. But this can lead to even greater problems.

One of the numerous risks arising under competition law in Poland is the risk of violation of the required procedures in contacts with the competition authority, including during the course of a search and inspection conducted by the Office of Competition and Consumer Protection (UOKiK). Such violations may involve delaying the start of the search and inspection by competition officials, failure to provide information demanded by inspectors, tampering with the materials provided, or informing third parties of commencement of an inspection.

When faced with an inspection, staff often attempt to delete e-mails or other content concerning questionable practices. But they do not realize that under current technology, such e-mails may always be recovered, and attempts to tamper with the content of IT systems may seriously impact on how the integrity of the business undergoing the inspection is perceived by the competition authority.

Many such violations are caused by a lack of knowledge on the part of employees of how they should act during an inspection. But the duty to comply with competition law applies to each and every member of the organisation, even rank and file employees, and the organisation is held responsible for actions by staff in violation of competition law.

This is why it is worthwhile to develop instructions in the event of an unannounced inspection (and to obtain a written undertaking by staff members that they will comply with the instructions). The instructions should include guidelines concerning rights and responsibilities during the course of the inspection. Employees should learn that they must not prohibit competition officials from entering the building or the premises, or delay their entry, provide them false or misleading information, hinder the inspection, or inform anyone else of the inspection without the express consent of the officials. On the affirmative side, staff should behave calmly, check the identification of the inspectors, accompany them during the inspection, demand the presence of an employee when actions are undertaken by the inspectors, and answer questions concretely and objectively, without volunteering personal opinions or observations.

In order to test the behaviour of staff, some companies organize a “mock dawn raid,” with the company’s lawyers playing the role of the competition authorities. Such exercises may be controversial, however, as it is forbidden to impersonate a public official.

“The procedures that apply during the course of an actual inspection must be followed precisely, because violations are subject to severe sanctions,” according to Sabina Famirska from the Competition Law Practice at Wardyński & Partners. “Failure to admit inspectors into a building, delaying their entry, or failure to provide them required documents is subject to a fine of up to EUR 50 million. The amount of the fine is not tied to the revenues of the enterprise. A fine may also be imposed on persons authorised to represent the enterprise during the course of the inspection, in an amount of up to 50 times the average monthly wage in the enterprise sector, i.e. up to about PLN 150,000. This is why it is immensely important to train employees, particularly receptionists, administration and IT staff, on how to behave during a competition inspection.”