The Senate of the Republic of Latvia, in its judgment of 19 December 2023, has upheld the judgment of the previous instance – the Administrative Regional Court –, thus confirming that the Competition Council (CC) is entitled to also retrieve the data of natural persons from electronic media during inspections and that the fundamental right to privacy of a person is subject to limitations taking into account the legitimate aim of the inspections.
In 2015, the CC initiated an investigation into prohibited agreement between companies on the market for the distribution of construction materials. As part of the investigation, on 15 July 2015, the CC carried out an unannounced inspection at the premises of SIA “DEPO DIY”. The CC took a full mirror image of the hard disk of the computers of the company’s employees and a member of the Board. The creation of a full mirror copy of a computer is most often necessary to obtain deleted files, encrypted data containers and files where it is not possible to identify the data on the spot during the procedural steps.
A member of the company’s Board took the CC to court the right to privacy had been violated as the computer also contained personal data. The member of the Board also asked the court to declare the CC’s action unlawful, to delete the personal data from the data carriers and to pay damages of EUR 7000.
Rights of the CC during the proceedings are laid down in the Competition Law
Rights of the CC during the proceedings are laid down in Section 9, paragraph five, Clause 4 of the Competition Law. Based on a judge’s decision, the CC may, in the presence of the police, without prior notice, enter the non-residential premises, vehicles, apartments, buildings and other movable and immovable objects owned, possessed or used by a market participant, open them and their storage facilities, carry out forced searches of these objects and inspect the property and documents contained therein, including information (data) stored in electronic information systems – computers, diskettes and other information carriers.
During the search and inspection, the CC shall have the right to inspect the documents and information contained in the electronic information system, including information containing trade secrets, to remove the found property and documents that may be relevant to the case, as well as to print or record the information (data) stored in the electronic information system on electronic media.
The Supreme Court recognises in its judgment that the purpose of the procedural steps is to search for evidence relating to the investigation case without knowing for certain whether such evidence exists, where exactly it is to be found and what it is. This in turn means that, in searching for evidence, the authorities will inevitably also have to process information which is not relevant to the case under investigation.
Therefore, the Supreme Court concludes that under the Competition Law “the Authority is not restricted to obtain more information than is necessary for the specific case. [...] It should be noted that the very data that may be necessary to prove an infringement may be concealed, so that, having regard to the purpose of the investigation, the Authority must be able to access all the information and assess its relevance to the investigation case, rather than relying on the persons themselves to indicate where to find certain information or which data are relevant to the investigation case.”
Conformity of the conduct with the Constitution and the legal rules of the European Union
In addition, the Court assessed whether the CC’s conduct violated Section 96 of the Constitution, which provides that everyone has the right to respect for private life, and whether the CC’s conduct complied with the findings of the European Court of Human Rights and the Court of Justice of the European Union.
The Court held that the right to respect for private life of an individual is limited on the basis of a legitimate aim – the protection of public welfare and the rights of others, since the detection and prevention of competition infringements both ensures the right of other market participants to compete in a free, fair and equal market and promotes the well-being of society as a whole.
Although the CC extracted all the data on the applicant’s computer, the personal data of the member of the Board were separated from the data necessary for the investigation case and were not added to the investigation case, but only stored to provide evidence in the proceedings brought by the member of the Board of SIA “DEPO DIY” for the unlawful use of personal data of an individual.
The European Court of Human Rights has previously stated that the most important thing is that the individual has the right to recover the documents or to obtain a guarantee that they will be deleted. The Court of Justice of the European Union has emphasised that the individual’s rights are respected if the relevance of the data obtained is assessed and only the documents found to be relevant are included in the case, and the other copied data are deleted. The Senate therefore concludes that the previous judgment of the Administrative Regional Court on the lawfulness of the CC’s conduct during the procedural steps was correct and that the cassation complaint of the member of the Board of SIA “DEPO DIY” should be dismissed.
INFORMATION:
The CC reminds that on 23 June 2022, the European Court of Human Rights also adopted a judgment in the case Naumenko and SIA “Rix Shipping” v. Latvia, which dismissed the complaint against the CC for alleged violation of Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (right to respect for private and family life, home and correspondence) when carrying out procedural actions or inspections at the premises of SIA “Rix Shipping”. The European Court of Human Rights concluded that the State’s interference with the rights of SIA “Rix Shipping” through the CC’s procedural actions under the Competition Law was proportionate and there was no violation of Article 8 of the Convention.