All posts tagged Competition Investigations

Trends in Document Review: Phase II Investigations

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Kroll Ontrack’s Document Review centre handles a real variety of projects, each one with unique requirements and for different purposes.  However, one trend we have noticed since opening last January is an increased number of clients requiring assistance in matters that stem from the mergers and acquisitions process. Pre- and post-merger audits and merger control RFIs from regulatory bodies such as the European Commission, the UK Competition and Markets Authority, the French Autorité de la concurrence, the German Bundeskartellamt as well as the US Department of Justice are just a few examples of incidences where ediscovery providers may be called upon for assistance.

Phase II is an in-depth analysis of the merger’s effects on competition and requires more time. It is opened when the case cannot be resolved in Phase I, i.e. when the Commission has concerns that the transaction could restrict competition in the internal market. A phase II investigation typically involves more extensive information gathering, including companies’ internal documents, extensive economic data, more detailed questionnaires to market participants, and/or site visits.

As mentioned in Kroll Ontrack’s landmark paper on the pressures faced by businesses from regulators, authorities such as the UK’s Competition and Markets Authority, European Commission and US Department of Justice are placing companies under increased scrutiny. As a result, corporations and their law firms are increasingly turning to the technology and specialist document review services offered by ediscovery providers to manage this data and reduce costs.

A recent Phase II request for information perhaps highlights why companies and their law firms are using managed document review services.  We were approached by a leading global law firm on behalf of their client, a FMCG supplier who had been subject to European Commission Phase II request for information and needed urgent document review services.

This case was particularly high priority as the client required highly-qualified review lawyers to start work within less than 24 hours at the weekend and had not contacted Kroll Ontrack until late on Friday afternoon.  However, despite this late notice, we were able to find the requested 7 lawyers to begin reviewing the next day.

Mid-way through the review, foreign language documents were discovered in the system. This could have represented a real set-back in terms of time needed for recruiting lawyers speaking the relevant languages. However, Kroll Ontrack’s pool of review lawyers are of such high calibre the existing team already contained several native and fluent speakers in those languages, despite language ability not being an initial criteria for selection.

In these circumstances, completing such a request in-house would have been incredibly difficult, not only from a technical standpoint but assembling, at short notice, qualified lawyers fluent in the unexpected languages.

Kroll Ontrack was able to provide a total of 42 review lawyers and conduct a privilege review of 19,000 documents and non-privileged review of 29,000 documents within 7 days.  Once the review was complete, the client was so impressed with our efficiency that 10 reviewers were retained in order to complete a redaction exercise.

 

Dawn Raids this week: be prepared

The London offices of BP and Shell were raided on Tuesday by the European Commission.  Statoil ASA in Norway also confirmed that they had been raided and were under investigation.  At the same time, our own panel of legal and technical experts was gathering to discuss the second in our series of webinars concerning electronic evidence in Europe entitled ‘Dawn Raid Survival’.  The topic and timing for this discussion could not, indeed, have been more appropriate…   If you did miss this session, there is a summary below or if you would like to listen to the webinar again in full, please see below:

Next webinar: Given the success of our last two sessions, I urge you to join us for our third webinar in this series on the 28 May at 14:00 CET: “Electronic Discovery: A Foreign Concept in Europe?”. To register please follow this link http://www.krollontrack.co.uk/webinars/electronic-discovery-a-foreign-concept-in-continental-europe/

We will be joined by Claire Bernier (partner at Altana, Paris), Santiago Gomez Sancha (Director of Information Services, Uria Menendez, Madrid), and Tina Shah (Electronic Evidence Consultant, Kroll Ontrack, London).

Dawn raid survival

In Tuesday’s raids the Commission had concerns the companies involved may have colluded in reporting distorted prices to a Price Reporting Agency in order to manipulate the published prices for oil and bio-fuel products.  For any suspected activity which negatively impacts on competition within the European marketplace, both the Commission and National regulatory authorities have power to intervene directly and ‘raid’ companies for evidence the activity.

How raided companies should respond in such volatile and high-stress situations, and what practical steps they should take was discussed by our panel which included: Dr Helmut Janssen (partner at Luther in Brussels and Dusseldorf), Julie Catala Marty (partner at Bird & Bird, Paris), and Rainer Ziener (Computer Forensic Consultant at Kroll Ontrack, Stuttgart).

Some of the main themes discussed were as follows:

Whilst the powers of the European Commission and National Authorities are broadly the same, important differences exist.  Helmut and Julie compared notes on the specifics of both the French and German authorities as compared to the Commission’s practices.  For example, Helmut pointed out that whilst the EU Competition authorities are authorized to enter premises to copy relevant information, German competition authorities have the right to physically remove property from the premises (including hard drives, phones and computers) for later analysis at the authorities’ office.  Companies should therefore take local legal advice as to how to respond in each case.

Julie provided a list of essential and practical tips companies should follow in the event of a dawn raid:

  1. Contacting a legal representative is the first thing to do, and the company should request that the investigation is not commenced before an advisor is present.  Mr Dirk van Erps (Head of Forenisc IT Group, Cartel Directorate of DG Comp) who was in attendance at our webinar clarified that the Commission would generally wait up to 20 minutes for a representative to arrive at the raided premises before commencing the investigation, but not longer.
  2. Legal advisers should check the scope of the investigation, in particular for details of the products concerned, the type of behavior and the time period under investigation.
  3. The company must keep track of the information the authorities are taking so they can collect their own copy and the legal teams can start reviewing it and organising their defence as soon as possible once the authorities have left.
  4. Informing the staff of what is going on is of paramount importance.  They should stay calm, not answer questions beyond the scope of the investigation or comment outside the company.  They must not destroy or delete documents and must remember that the company is under a duty to cooperate fully.
  5. It is also was important to keep the business running and Julie suggested the authorities could be asked if it is possible to use equipment needed to continue basic operations.

The panelists also discussed the difficulties that arise when legally privileged information falls into the hands of the authorities and how to handle the restitution of this information.

In terms of the IT aspects of raids, Rainer Ziener of Kroll Ontrack emphasized that different types of data storage media and IT architecture make the job of extracting information quickly quite challenging.  Being prepared ahead of a raid by having a data map and inventory of hardware was strongly recommended.  This ensures both that cooperation with the authorities can take place, but also facilitates the rapid formulation of a legal strategy and defence once the authorities have left.  It could take significantly more time to assist a company after a dawn raid if it does not have a detailed knowledge of the firm’s IT infrastructure.

Julie emphasized that Mock Dawn Raids help reduce the risk of mistakes during an actual raid (which can be extremely costly).  They test the reflexes of the business and help assess the risk of company infringing the law.

About James Farnell

Qualified solicitor (commercial and intellectual property law) with four years international business development experience following four years of legal practice. Experienced in analysis and research of new business opportunities and developing new business strategy. Excellent project and people management skills. Successful record in developing new business products and revenue streams within the legal sector.

Electronic evidence in Continental Europe

Andrew Szczech - Kroll OntrackAs the first of our series of webinars about the use of electronic evidence in Europe is about to start (Tuesday 30 April), I thought it would be a good time to say a few words on the subject.  For our webinar series, we have been able to bring together a prestigious group of representatives of international companies and legal practitioners (along with our own e-discovery experts) to have an open discussion about how e-discovery technology is being used in Europe.  Given the calibre of the speakers, the discussions are set to be highly informative, and I’m very pleased to be moderating this discussion.

Having worked in this business for over nine years, we are seeing a number of ways in which e-discovery technology is assisting our clients in Europe.  Whilst the appetite for e-discovery technology here does not yet match that of the UK, or the US (the legal systems in Europe generally being of inquisitorial nature rather than adversarial) – electronic evidence still has an important part to play.

The main area in which we see the bulk of activity is (understandably due to the volume of documents involved) assisting clients to respond to EU competition investigations (both by local competition authorities and the European Commission).  These require a rapid response rate and the requisite experience to put in place the right strategy to deliver the results required.  However, in addition to responding to regulators, we have increasingly assisted companies to perform their own ‘internal audits’ in order to flush out any potential issues and deal with these (either through leniency applications to the authorities or even sometimes immunity) before any intervention by the authorities.  Another separate angle for e-discovery is that with the proliferation of different modes of communication in use today, from use of personal devices (iPads, iPods, Android phones and tablets) but also messaging systems (Reuters, Bloomberg, Instant Messenger, etc),  companies and law firms can benefit from the proper management of electronic evidence – whether this is helping to prevent theft of intellectual property, finding a key piece of evidence that supports your case, or simply checking that the business is running as it should.

Navigating the complex data protection laws in Europe when moving data across borders can prove challenging, but there are always practical approaches that can be adopted to overcome these obstacles.

I’m proud to say that our European team is growing, and that our new member, James Farnell, joins us a Legal Consultant for Continental Europe.  James is a UK qualified solicitor and will initially be working with us in Brussels and the Nordics.

I hope you can join us next week for the start of our European webinars series, Staying a Step Ahead of the Regulators, and will look forward to updating you on my next post.

About Andrew Szczech

Andrew Szczech, Director of Legal Technologies Services, EMEA, is responsible for the business development of Kroll Ontrack's legal technologies business in Europe, focussing on the provision of electronic evidence services to law firms and corporates. These services include e-discovery, computer forensics and consulting which are provided in order to assist clients in multiple practice areas including dispute resolution and antitrust. Frequently, there is a need for solutions to address complex cross border data protection challenges. Andrew also manages the growth and development of global accounts throughout Europe.