The Market Court has significantly lowered a fine proposed by the Finnish Competition and Consumer Authority (“FCCA”) to Attendo Finland Ltd. (“Attendo”) for obstructing an on-site inspection carried out by the FCCA. This was the first time a fine has been imposed in Finland for a procedural violation of the Finnish Competition Act.
The FCCA had made a proposal to the Market Court for the imposition of a fine in the amount of 4.4 million euros to Attendo following to a company employee having deleted WhatsApp-messages during the conduct of an on-site inspection carried out by the FCCA. Attendo, having become aware of its employee’s conduct, had managed to retrieve the backups of the messages and delivered the data to the FCCA. At the outset of the inspection, an Attendo director had instructed the staff not to delete messages from their mobile devices. At the Market Court, Attendo argued that the fine proposed by the FCCA was unfounded and at least, the amount proposed was unreasonable.
According to the FCCA, the specific conduct constituted a serious violation. The deleted messages were not private in nature but linked to the company’s business, and the removed information was central to the FCCA’s investigation. Further, the number of deleted messages was significant, and the conduct aimed at leaving that information outside the scope of data and information searched. Moreover, the deletion of messages delayed the conduct of the inspection and resulted in additional work for the FCCA’s officials. According to the FCCA, the digital nature of the deleted information highlighted the seriousness of the conduct. In view of Attendo’s cooperation with the FCCA, the amount of the proposed sanction had already been reduced by 20 per cent.
The Market Court found established that the employee in question, conscious of the start of the inspection, had deleted five WhatsApp conversations and a call log from a mobile device after the start of the inspection. The employee had also been conscious that the contents of the mobile device were inspected by the FCCA officials. The Market Court also found that the search of the employee’s mobile device did not require a prior authorisation. As the inspection pursuant to the Competition Act was directed at Attendo and companies under its control, the FCCA had the right to examine all recording media available to the company group subject to the inspection. The FCCA was competent to seize and search an employee’s mobile device used for work purposes. Furthermore, the inspection was carried out at Attendo’s business premises.
The Market Court further held that the deletion of WhatsApp conversations and call log constituted conduct obstructing an inspection within the meaning of the Competition Act and which was therefore possible to sanction. In accordance with the established case-law of the European Court of Justice, for a finding of competition law violation suffices the conduct of a person entitled to act on behalf of a company. It is not necessary that the management or other employees have been aware of the violation. The Market Court considered this to be the starting point when assessing whether a company could be held to have obstructed an inspection.
In the present case, the employee had the authority to act on Attendo’s behalf and it had been Attendo’s duty, following to the notification of the inspection, to ensure that its employee did not obstruct, hinder or delay the conduct of the inspection by deleting data. The Market Court held Attendo to be responsible for the intentional conduct of its employees, irrespective of whether the company knew of its employee’s conduct, whether the employee had acted in violation of the company’s instructions when deleting the information, or whether the employee’s conduct could have been prevented by the company. The Market Court confirmed Attendo’s conduct to have violated the Competition Act insofar as it obstructed an inspection into a suspected competition restriction. The conduct in question (obstructing an inspection) was, according to the Market Court, a serious infringement. Given that the employee’s conduct was intentional, the Market Court held that the conduct could not be regarded of minor importance, and hence the imposition of a fine was founded.
The Market Court stated that when assessing the amount of the fine, it had to consider the importance attached by the employee to the inspection as well as the position held by that employee within Attendo’s organisation at the time of the violating conduct. Furthermore, the Market Court stated that, in assessing Attendo’s conduct, account must be taken of the fact that, prior to the inspection in question, the company had instructed and trained its staff not to destroy documents in the event of a surprise inspection by a competition authority. The employee who committed the violation had attended these training sessions and was aware of the instructions. In addition, Attendo’s manager had prohibited the employee from deleting information during the FCCA’s inspection. The Market Court found that the employee’s actions in disregard of competition law and company’s instructions were unexpected and practically impossible for Attendo to prevent.
The Market Court further found that Attendo, having been made aware of its employee’s actions, had immediately started to investigate the incident and had, on its own initiative, delivered to the FCCA a cloud-service backup copy of the deleted messages. The Market Court further noted that the digital nature of the deleted data could not be considered as a factor that highlighted the seriousness of the violation in this case, contrary to the FCCA’s assertions. According to the Market Court, the deleted call log should not have been given any significant weight in the assessment of the amount of the fine, since it would not have provided any additional evidence for the investigation.
The Market Court found that the evidence showed that Attendo had taken measures to ensure not only that the deletion would not have occurred, but also that its employee’s actions would cause minimal harm to the FCCA’s investigation. As a result of Attendo’s actions, the violation could not be considered to have caused any factual harm to the investigation into a suspected competition restriction. The company was not even alleged to have sought an advantage by violating procedural rules, and it had not been sanctioned for procedural violation in the past.
The Market Court gave more weight to the above alleviating factors in its overall assessment than the FCCA had in its proposal. Although Attendo is liable for its employees’ actions and the deletion of information was likely to undermine the purpose and conduct of the investigation, the Market Court found that Attendo’s acts significantly reduced the harm and objectional nature of its employee’s actions. In view of the abovementioned factors, the Market Court found that Attendo should be ordered to pay a fine of 1.5 million euros, as opposed to the 4.4 million euros proposed by the FCCA.
The conclusions to be drawn from the Market Court’s decision is that, as a rule, a company remains always responsible for a procedural violation of the Competition Act by its employees, regardless of whether the company’s management knew of the conduct or whether the employee acted against the company’s management’s unambiguous instructions or prohibition. It can also be inferred from the reasoning behind the decision that if a company has properly trained and instructed its personnel on competition law compliance in inspection situations, this is a significant factor lowering the amount of a fine for a procedural violation. A fine can seemingly also be lowered if the company is able to effectively and expeditiously remedy its employee’s procedural violation in such a way that the violating conduct does not cause a significant delay in the FCCA’s inspection or investigative measures.
The decision also serves as a good reminder for companies of the importance of regular training for the eventuality of a competition law inspection. It also provides clear guidelines for company management as how to proceed in the event of procedural violation by an employee during an inspection. It should be noted that a breach of the procedural provisions of the Competition Act may result in significant fines for the company, even if, ultimately, the company is found not to have involved in any suspected competition restriction. Companies should therefore emphasise to their employees not only the importance of complying with the actual competition rules but also the procedural provisions of the Competition Act, and to regularly train their personnel and update the employees’ instructions for inspection situations.
