Clifford Chance

The European Commission (“Commission”) has fined US group Flavors & Fragrances (“IFF”) €15.9 million for obstructing a Commission inspection in 2023 that sought evidence of possible anti-competitive practices in the supply of perfumes and perfumery ingredients.

After being informed of the inspection, a senior employee at IFF intentionally deleted WhatsApp messages exchanged with a competitor containing business-related information. It was the Commission itself that noticed this after inspecting the device.

The Commission can conduct inspections at the premises of companies if there are suspicions of breaches of EU competition law. The Commission is empowered to make copies of relevant information regardless of the format in which the information is found. During inspections, companies must actively cooperate with inspectors and preserve the available evidence. The Commission may impose fines of up to 1% of the worldwide group turnover of companies that intentionally or negligently obstruct their investigations.

In the case of IFF, the Commission deemed the infringement to be very serious, particularly given that the senior employee was directly implicated in the investigation, the messages were deleted after being informed of the inspection, and the Commission had to discover the deletion itself. The fine imposed, amounting to 0.3% of IFF's total turnover, could have exceeded €30 million, but IFF was granted a 50% reduction for acknowledging the facts following the deletion of the WhatsApp messages and cooperating proactively during and after the inspection.

Although this is the first Commission decision imposing a fine for deleting messages exchanged via social media on a mobile device, similar practices have previously been condemned by competition authorities in EU member states. At the end of 2019 the Dutch competition authority imposed a penalty of €1.89 million on a company whose employees left WhatsApp groups and deleted conversations during an inspection; in that case too, the acknowledgement of the facts by the company and its cooperation (offering to recover all deleted messages) led to a 20% reduction in the fine. Last year, the Polish competition authority imposed fines of €2.4 million on companies whose employees deleted WhatsApp messages exchanged between companies after the inspection had begun.
 

Back in 2012, the Commission had already held the blocking of an email account and the redirection of incoming mails, both during an inspection, to constitute obstruction. As such, a penalty of €2.5 million was imposed on the Czech energy companies Energetický a průmyslový holding and EP Investment Advisors, equivalent to 0.25% of their total turnover. Moreover, the fact that much of the incriminating evidence was found in the deleted items of an email account following a leak of antitrust inspections in the industry was considered by the Spanish competition authority to be an attempt to conceal evidence at the time of the inspection, leading to an aggravating circumstance being applied in the main case.

Nowadays, much of a company's information can be found on digital devices and is apparently easy to edit or delete. Competition authorities are fully aware of this and have technology in place to identify and reverse the most sophisticated manipulations. Awareness of competition law among companies and training employees on appropriate conduct during antitrust inspections are essential to preventing actions that may seem irrelevant in our daily lives but can cause serious problems in the corporate arena.