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Cartel Court confirms AFCA course of action during dawn raid in relation to legal professional privilege

In spring 2022 the Austrian Federal Competition Authority (AFCA) carried out a dawn raid at a company suspected, among other things, of abuse of a dominant position.

The company requested – based on § 12 para. 5 of the Federal Competition Act (WettbG) – that the Cartel Court review certain individually specified electronic documents that are subject to  legal professional privilege, in the company’s view (right to object). According to this provision, the company subjected to a dawn raid may object to the inspection of documents “referring to legally granted secrecy or to its right to refuse to give evidence in accordance with § 157 para. 1 subparas. 2 to 5 Code of Criminal Procedure”.

Extent of right to object pursuant to § 12 para. 5 WettbG

In relation to case 24 Kt 4/22a the Cartel Court has now again – in accordance with the Supreme Cartel Court’s previous decision on case 16 Ok 2/14 – found that objection procedures pursuant to § 12 para. 5 WettbG have been deliberately worded to limit the group of parties entitled to object. Investigations should be conducted rapidly and efficiently. If documents have been attributed a liberal secrecy protection, this would result in the need for time-consuming, separate reviews by a court, which would in turn considerably delay investigations.

Consequently, a party is only entitled to object pursuant to § 12 para. 5 WettbG when they themselves are under a duty to observe secrecy or entitled to refuse to testify. Legal professionals or medical doctors would be entitled to object, for instance. Since the company subject to the dawn raid was not a party entitled to object, the documents had to be returned returned to AFCA's investigation file.

Correspondence between companies and independent legal advisers protected by AFCA in accordance with European legislation

Only recently, in July 2022, the AFCA published a revision of its Guidance on dawn raids (in German, English update to follow). The Guidance now explicitly describes how to deal with (physical and/or electronic) documents that contain correspondence with a lawyer; a practice AFCA staff have previously already followed. In accordance with European legislation, the AFCA respects the protection of correspondence between companies and independent legal advisers, which is maintained within the scope and in the interests of the company for legal defence purposes (legal professional privilege according to cartel law).

In practice, the AFCA informs the company of which documents it intends to add to its investigation file after having evaluated the seized electronic documents. The companies are given the opportunity to make a statement.

In addition, the AFCA is also obliged to adhere to the fundamental rights applicable in Austria, the Charter of Fundamental Rights of the European Union, as well as the general principles of EU law when processing documents and when exercising its powers in general.

The Cartel Court’s decision on 24 Kt 4/22a is final.