Time to consider polishing up dawn raid procedures
In the wake of greater scrutiny, companies in the EV sector should stay abreast of competition developments as well as the potential for unannounced inspections. By Michael Engel
As with many fast-growing industries, competition regulators are keeping a watchful eye on the electric vehicle (EV) sector. With the UK and European Union (EU) introducing laws to ban new gasoline and diesel cars by 2030 and 2035 respectively, the industry is in a race against time. The challenge for regulators is to ensure that this need for speed doesn’t detriment consumers by leading to unfair practice, cartels, or monopolies.
Charging infrastructure has come under particular scrutiny. In July, EU lawmakers backed a new set of rules for charging stations which stipulate the need for charging pools every 60km along Trans-European Transport Network routes by 2026. Meanwhile, UK operators face new obligations over payment options, reliability targets, and access to operations data as the government aims to alleviate ‘range anxiety’ and boost public confidence in using EVs.
The EU’s antitrust chief Margrethe Vestager commented that EV charging is “actually developing quite well”, following a Charles River Associates report which concluded that there are no major competitive concerns. However, national competition authorities show no sign of dropping interest.
With more work-related materials created or stored at home, authorities are focussing more increasingly than ever on IT search, private devices used for work, and even possibly entry into domestic premises and the removal of material under warrant
In April, Italy’s competition authority launched an ‘abuse of dominance’ probe into the energy giant Entel over anti-competitive pricing in the EV charging space. A month later, the French regulator sent questionnaires to key industry players including charging operators, as part of its enquiry into infrastructure. The Spanish decided to join the party in July, opening an investigation into obstacles that could hinder charge point rollout in the country.
In light of such scrutiny, companies in the EV sector should stay abreast of competition developments as well as the potential for unannounced inspections or “dawn raids”. Indeed, to challenge accusations that it has been on the back foot since the pandemic, the European Commission is doing its best to increase the volume of such investigations.
Last year, dawn raids hit pre-pandemic highs with 64 conducted across the continent. The automotive sector alone has experienced four unannounced raids since 2021 from a combination of the EU, UK, Romanian and Polish competition authorities.
Organisations risk high fines and reputational damage for the obstruction of dawn raids, and should implement training and formalised procedures so they are prepared if a raid occurs. Even companies with an existing dawn raid procedure should consider updating it to ensure that it deals with the changes in approach that the authorities are making to deal with new post-pandemic hybrid working models. With more work-related materials created or stored at home, authorities are focussing more increasingly than ever on IT search, private devices used for work, and even possibly entry into domestic premises and the removal of material under warrant.
With respect to IT search, officials have the right to seize and search documents stored on the cloud, recover deleted files, and inspect any electronic devices—including personal phones if used for business purposes. Employees working in customer-facing roles, senior management, and selected members of the IT department should be at the head of the queue for training. They should know how to assert their rights of defence on a raid, especially their privacy rights with respect to private documents and photos which have been stored on work or personal devices.
As new legislation around EV charging emerges and competition authorities continue to keep a close eye on how the sector is evolving, there is no better time to ensure that dawn raid procedures are fully up-to-date.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd. or White & Case
Michael Engel is a Partner at White & Case
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