What does it take to jolt you into life each morning? A strong cup of coffee? How about an army of competition officials marching into your office without warning?
In March, the European Commission led such a dawn raid — “unannounced inspections,” to use the commission’s terminology — on the headquarters of EDF, a French energy firm, after it became concerned about potential illegal conduct that “may include actions to raise prices on the French wholesale electricity market.”
How would you and your colleagues handle such an intrusion? Rosalind Kellaway, head of the competition group at law firm Eversheds, says it’s common for companies to be uncertain about how to react. “You don’t want employees panicking, failing to follow set procedures or even starting to shred documents,” she says, although the reality is that many do.
Little wonder, then, that Eversheds and several other law firms now offer dawn-raid training courses for companies, whereby a group of lawyers arrive at a client’s office unannounced — as competition officials would do — to test employees’ mettle and offer advice on their performance.
The penalties for panicking, or worse, can be steep. In 2006, a commission team raided the offices of E.ON, a German energy firm, after allegations of anti-competitive practices in its domestic electricity market. When investigators returned the next day, a seal placed across one of the office doors had been broken — with evidence of a botched attempt at mending it. E.ON argued that the seal could have been broken by vibrations from a conference held next door or by a cleaner using a particularly “aggressive” cleaning product. It was slapped with a €38m fine. That’s an expensive wake-up call.