In a ruling of June 13, 2019, the French Supreme Court annulled the November 8, 2017 order of the Paris Court of Appeals that confirmed the validity of the search warrants authorizing the French Competition Authority (the “FCA”) to carry out dawn raids at Whirlpool France’s premises.[1]
In October 2013, the FCA conducted dawn raids at the premises of Samsung and Fagor Brandt as part of an investigation into potentially anticompetitive agreements in the sector of domestic appliances. Based on evidence seized during these dawn raids, the FCA requested an authorization to carry out further dawn raids at Whirlpool France’s premises, which was granted by the competent judges on May 21 and 22, 2014. Consequently, the FCA conducted dawn raids at Whirlpool France’s premises on May 27 and 28, 2014.
Whirlpool France challenged the search warrant authorizing the May 2014 dawn raids before the Paris Court of Appeals, arguing notably that the FCA had violated Article L. 450-4 of the French Commercial Code. Pursuant to this article, companies implicated in antitrust proceedings based on evidence seized during third party dawn raids may challenge such dawn raids within ten days from the notification of the corresponding search warrant and dawn raids minutes and at the latest, at the statement of objections. Whirlpool France contended that the FCA breached its right to an effective remedy against the October 2013 dawn raids and violated Article L. 450-4 of the French Commercial Code by failing to attach the Samsung and Fagor Brandt’s search order and dawn raid minutes to the search warrant authorizing the subsequent May 2014 dawn raids at Whirlpool’s premises. In an order issued on November 8, 2017, the Paris Court of Appeals dismissed Whirlpool France’s appeal and held that it was sufficient to give notification at the time of the statement of objections.
Breach of Whirlpool France’s right to an effective remedy against the October 2013 dawn raids
The French Supreme Court followed Whirlpool France’s argument and held that, in order to preserve its right to an effective remedy, the Samsung and Fagor Brandt’s search order and dawn raid minutes should have been presented to Whirlpool France at the time of the May 2014 dawn raids and should have been attached to the FCA’s request for authorization from the judge and to the order granting the authorization for the May 2014 dawn raids.
Clarifying rights of defense under Article L. 450-4 of the French Commercial Code
The French Supreme Court clarified the notion of a company “implicated in the proceedings” under Article L. 450-4 of the French Commercial Code. It is now clear that a company targeted by a FCA request for an authorization to carry out dawn raids at its premises on the basis of evidence seized during previous dawn raids at the premises of third party companies is considered “implicated in the proceedings” from the date of that request, and not only after being notified of the FCA’s statement of objections.
The French Supreme Court thus annulled the order of November 8, 2017 of the Paris Court of Appeals, and referred the case to a renewed Court of Appeals. This ruling therefore clarifies the rights of companies subject to investigations, in particular when implicated in proceedings on the basis of evidence seized during dawn raids in which they were not involved.
[1] French Supreme Court, June 13, 2019, Decision No. 17-87.364, annulling the order of the presiding Judge of the Paris Court of Appeals, November 8, 2017, No. 14/13378, which confirmed the order of May 21, 2014 of the Paris Liberty and Custody Judge and the order of May 22, 2014 of the Nanterre Liberty and Custody Judge.