EU competition raids on Fox

11 Apr 2018

This morning, EU officials charged with the investigation and regulation of anti-competitive practices carried out “dawn raid” style raids on The Fox Networks Group offices. FNG operates  the worldwide TV network of 21st Century Fox. This is one of a series of simultaneous raids on a number of organisations.

 The purpose of the raids was to investigate what the EU Officials described as  

 "concerns that the companies involved may have violated EU antitrust rules that prohibit cartels and restrictive business practices."

EU officials stressed though, that whilst the inspections were a first step in the investigatory process, the raids did not mean that the companies concerned were in breach of EU competition laws.

What are the powers of the officials tasked with regulating restrictive practices?

 The main point to note is that the EU Commission need give no notice of any inspection. Inspections without notice are normally characterised as “dawn raid” powers.

On arrival, the EU Commission officials normally in company with the domestic enforcement agency the Competition and Markets Authority will present the following:

  • The Commission “Decision” to investigate, where the investigation is undertaken under an EU “Decision”
  • Their authorisation
  • Any notes, explaining to the company concerned, the Commission's powers to carry out inspections under Article 18 of Regulation 1/2003
  • Identity cards: to identify the Commission officials authorised to inspect.

Fox Networks Group have stated that they are co-operating with the Investigation. They are well advised to do so.

Failure to co-operate can lead to heavy fines

 The EU has powers to impose penalties of up to 1% of an organisation’s total turnover ie its “top line” for the preceding business year if it:

  • Intentionally supplies incorrect information or information that is misleading
  • Negligently supplies incorrect information or information that is misleading
  • Failing to provide required documents or information within a deadline set by the EU
  • Obstructing or Refusing to submit to an inspection.

In addition to the above, the EU can impose fines of up to 5% of average daily turnover if a corporation:

  • Fails to supply complete and/or correct information
  • Fails to co-operate in/ Submit to an inspection.

In order to investigate anti-competitive trade practices under Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), the Commission has the power:

  1. to require documents and/or information from suspected organisations
  2. to ask in writing any person to submit to interview any person (with their consents)
  3. to conduct dawn raids (as we have seen above).

The Commission can:

  • Enter business and even domestic premises (including vehicles)
  • Inspect company/ organisation accounting books and other business records (whether held electronically or in hard copy)
  • Take copies of any documents
  • Seal off any premises documents/ books or records during the inquiry
  • Request oral evidence on-the-spot about facts and documents.

When can these powers be used?

The Commission can use its powers as and when "necessary", but it is submitted that it must have some reasonable grounds for so doing.



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