On 15 October, the General Court (“GC”) rejected Red Bull’s appeal against the European Commission (“EC”) dawn raid decision, in a case triggered by an informal complaint from Red Bull’s competitor, Monster Energy.
In summary, the GC found that:
- The decision was sufficiently reasoned, and in particular contained a clear description of the alleged infringement requiring no “excessive interpretative effort” (the new legal standard?).
- The Commission had enough evidence to suspect the existence of an infringement (c. 700 pages of submissions from the complainant).
- Ordering an inspection (rather than sending an information request) was not disproportionate given the nature of the suspicions and the risk that Red Bull would not volunteer information.
- Red Bull’s arguments relating to the legality and proportionality of measures taken during the inspection, including alleged breaches of the right of defence and extremely long duration of the continued inspection (6 weeks!), were found inadmissible or ineffective given that the appeal was directed at the inspection decision itself.
The judgment contains interesting takeaways regarding the reasoning of dawn raid decisions, the sufficiency of evidence needed by the EC to order an inspection, the proportionality of dawn raids as investigative measures, and the admissibility of challenges against measures taken during the raid.
Background
Red Bull was raided in March 2023 in several Member States regarding its dealings with retailers and on suspicion that (i) the company granted financial incentives to retailers on condition that they remove products sold in units larger than 250ml from their range, (ii) ran a smear campaign against energy drinks sold in units larger than 250 ml, and (iii) agree with competitors, in a trade association context, to restrict the sale of drinks in units larger than 250ml.
The case was triggered by a complaint from Red Bull’s competitor, Monster Energy (which, as any parent of teenagers would know, sells energy drinks in units larger than 250ml).
The on-site inspection lasted 5 days but the inspectors took with them several terabytes of electronic documents and continued the inspection at the EC’s premises from 14 June to 20 June 2023 and from 29 August to 29 September (i.e., almost 7 weeks of inspection in total!).
Red Bull appealed the inspection decision in May 2023 and requested interim measures in July 2023 to suspend the continuation of the inspection. It argued that the measures were necessary to protect against the risk (i) of disclosure of documents containing personal data of employees and (ii) of disproportionate interference with the company’s right to privacy (disproportionate duration of the continued inspection). The GC swiftly rejected the application on 28 September 2023 (without a hearing), finding that privacy rights were sufficiently protected (e.g. thanks to safeguards put in place by the EC) and that another 6 weeks of continued inspection (as anticipated by the EC) was not disproportionate.
Unusually, Red Bull appears to have requested the reimbursement of the costs of the continued inspection in Brussels, probably relying on the Nexans case,[1] which contemplates that possibility. The EC presumably rejected such request, and Red Bull appealed the EC’s rejection before the General Court on 30 December 2024 (still pending).
The GC’s judgment
In its appeal, Red Bull raised several pleas concerning the legality of the decision, namely (i) deficient reasoning, (ii) arbitrary nature (did the Commission have enough evidence / suspicions of an infringement to justify an inspection?), and (iii) lack of proportionality (EC should have sent an RFI instead). Red Bull also raised issues with the conduct of the inspection and asked for the annulment of all measures taken during the inspection, including its continuation at the EC premises. The GC rejected all Red Bull’s pleas.
Lack of reasoning
The GC conducted a detailed review of the decision’s wording and found it sufficiently reasoned. It highlighted that the decision described the relevant sector, the geographic market, the nature of the suspected restrictions, and Red Bull’s presumed involvement (including granting financial incentives for de-referencing competitors, participating in EDE meetings, and carrying out a denigration campaign) (paras. 45-56). Notably, the GC drew on AG Wahl’s opinion in HeidelbergCement,[2] holding that Red Bull could grasp the decision’s subject matter “without an excessive interpretative effort.” The GC’s approach may provide a future benchmark for the reasoning required in a dawn raid decision.
The Court also rejected that the use of words like “in particular” or “potential” was such as to cast doubt on the scope of the inspection or made it difficult for Red Bull to understand the subject matter (para. 57-61). This is consistent with the Symrise case,[3] in which the Court rejected similar arguments (unlike previous cases in which similar words were criticized as blurring the scope of the investigative measure[4]). It now seems that the EC may get more leeway for the use of adverbs or adverbial phrases in its decisions, if they do not require an excessive interpretative effort.
Arbitrary nature of the decision
At Red Bull’s request, the GC adopted a measure of organization of procedure requiring the EC to produce the evidence underpinning the decision, as it had recently done in Symrise (T-263/23) and French Retailers (e.g. T-254/17). As an aside, this confirms that the GC is willing to order the production of evidence to review claims of arbitrariness in the EC’s inspections. This is a welcome development, given the EC’s unwillingness to share any evidence with the companies concerned at the time of notification of the inspection decision, as already occurs in some Member States. The latter should be reconsidered in the on-going review of Regulation 1/2003, as the EC would potentially avoid certain appeals (aimed at obtaining early access to evidence) if it was more forthcoming in this respect.
The EC responded positively to the GC’s request but asked for confidential treatment over the information produced, namely an informal complaint by a competitor. The GC thus ordered the EC to prepare a list and summary for the evidence, to which Red Bull’s lawyers were granted access after they signed a confidentiality undertaking (paras. 17-24).
It is not unusual for the Court to limit access to a non-confidential version of the evidence and to limit the access to lawyers only. But in French Retailers, the GC agreed to the disclosure of non-confidential versions of all the evidence to the applicants (and not just their lawyers).
In the Red Bull case, it is understandable that the Court did not request the production of a non-confidential version of the evidence, as it spanned over 700 pages. However, one may wonder why the Court did not order either of the following two less restrictive (for the rights of defence) solutions: (1) full disclosure of the evidence to the lawyers only; or (2) disclosure of the summary to the lawyers and their client (or indeed a combination of both).
In any case, the GC considered that the summary of the evidence provided by the EC showed that the latter held a detailed and substantiated complaint, that the EC took several steps to clarify the complaint with the complainant, and that the later made several additional submissions (paras. 72-80). The Court found that information from a unique source (complaint) was enough, and that the EC did not need to verify the information with third parties, as this could have led Red Bull to suspect an investigation and thus compromised the inspection (para 81). On this basis, it considered that the EC had enough evidence to suspect an infringement.
The Court also rejected Red Bull’s allegation that the suspected conduct was not liable to breach Articles 101 and / or 102. The Court reviewed the three suspicions of infringement listed in the decision and found that each of them could plausibly lead to a finding of an infringement, especially in light of the fact that Red Bull’s main competitor sold energy drinks in units larger than 500ml.
Breach of the principle of proportionality
Red Bull’s first claim was that the Commission should have adopted a request for information (RFI) rather than ordering an inspection. Unsurprisingly, the Court rejected this plea, confirming that the EC enjoys a wide discretion in the investigative instrument it wishes to use (para 122). In this case, it found that, given the nature of the suspected conduct, it was hardly plausible that the EC would have obtained the same evidence through an RFI.
Red Bull’s second claim was that the continuation of the inspection for several weeks at the EC premises was disproportionate. The Court rejected it on the basis that it concerned the execution of the inspection decision and was therefore ineffective to challenge the legality of the decision (which was the object of Red Bull’s appeal).
Violation of the rights of defence during the inspection
Red Bull argued that the EC committed serious violations of its rights of defence during the inspection (para 138):
- The receptionist of Red Bull GmbH and her colleagues were said to have been subjected to aggressive behaviour on the part of the Commission’s agents, who allegedly refused to identify themselves and, notwithstanding that refusal, allegedly insisted on being taken to a manager.
- One of the Commission’s agents was alleged to have physically prevented the receptionist from alerting the security service by hanging up the phone.
- Agents allegedly prohibited Red Bull GmbH’s employees, including the person responsible for competition matters, from contacting an external lawyer. The latter was authorised to do so only 45 minutes after the arrival of the Commission’s agents, and on condition that the call be made on loudspeaker, in the presence of those agents.
- The head of the Commission’s inspection team allegedly refused to have the conduct of the inspection recorded in the minutes.
The Commission rejected these allegations.
The Court declined to engage on the merits of Red Bull’s allegations and held that they all concerned the execution of the decision. As such, and in line with the case law, they were thus irrelevant to judge the legality of the decision, which can only be appraised based on circumstances of facts existing when the decision was adopted.
The court’s decision is in line with existing case law and is premised on the fact that Red Bull’s appeal targeted the dawn raid decision itself. In the French Retailers case, the Court of Justice made it clear that undertakings subject to an inspection “have the possibility of bringing an action challenging any act adopted by the Commission following an inspection decision, including in the course of the inspection operations, provided that that act is challengeable through such an action in view of the conditions laid down in the case-law” (para 55).
Based on this case law, to the extent that any of the violations identified by Red Bull could be characterised as a separate challengeable act, they could (should) have been challenged in a separate appeal. Easier said than done, however. In any case, Red Bull will maintain the possibility of challenging these measures as part of a challenge against any final decision of the EC.
Takeaways
This case gives interesting guidance on several points, which are common to challenge of inspection decisions:
- On the reasoning of the decision: the decision will survive judicial review as long as the EC provides indications on the sector, the geographic market, the nature of the suspected restrictions, and the company’s presumed involvement (and that no “excessive interpretation effort” is required).
- On the evidence required to launch an inspection: one source (a complaint, albeit informal) is enough and no investigation with third parties is necessary. The case also shows, once again, the GC’s willingness to scrutinize the sufficiency of the evidence in the EC’s file when ordering an inspection.
- Proportionality: the EC enjoys a wide discretion in deciding to go on a raid rather than issue an RFI.
- Measures taken during the raid (or indeed the continued inspection) should not be challenged together with the dawn raid decision, as such challenge will be deemed inadmissible. Litigants should file separate appeals where such measures can be characterised as separate challengeable acts (if necessary, by triggering new decisions by the EC).
- While the appeal against the very long duration of the continued inspection was rejected as inadmissible, it will be interesting to see what the GC decides in the appeal concerning the cost of such an inspection. Six weeks of at the EC premises with external lawyers involved likely led to a very high cost, indeed perhaps a disproportionate one.
[1] C-606/18 P – Nexans and Nexans France v Commission, ECLI:EU:C:2020:571, para. 90.
[2] Opinion of AG Wahl in C-247/14 P, EU:C:2015:694, para. 42
[3] T-263/23, EU:T:2025:417, para. 46
[4] See, for example, Nexans T-135/09 in which the GC took issue with the use of terms like “amongst others” in the reasoning of the decision (paras. 50 and 54).
