The European Commission has fined International Flavors & Fragrances Inc. and International Flavors & Fragrances IFF France SAS (together 'IFF') €15.9 million for obstructing a Commission inspection in 2023. The Commission found that during the inspection, a senior employee of IFF intentionally deleted WhatsApp messages exchanged with a competitor.
The Commission's investigation
In March 2023, the Commission carried out inspections at the premises of companies active in the consumer fragrance industry.
During its inspection, the Commission asked to review the mobile telephones of some of IFF's employees. While reviewing, the Commission detected that a senior employee had deleted WhatsApp messages exchanged with a competitor containing business-related information. The deletion took place after the employee had been informed about the Commission's inspection.
After the detection, IFF immediately acknowledged the facts and proactively cooperated with the Commission during and after the inspection. IFF cooperated by helping the Commission recover the deleted data.
In March 2024, the Commission opened proceedings against IFF for obstructing its investigation. IFF engaged in a cooperation procedure by acknowledging its liability and accepting the maximum amount of the fine.
The fine
According to the Regulation No 1/2003, the Commission can impose fines of up to 1% of the total turnover of companies, which intentionally or negligently obstruct an antitrust investigation. In setting the amount of a fine, the Commission takes into account both the gravity and the duration of the infringement.
The Commission considers that the infringement committed by IFF is of a very serious nature, particularly given that the senior employee intentionally deleted the WhatsApp messages after having been informed about the Commission's inspection. In addition, the Commission was not informed of the data deletion. Instead, Commission inspectors had to detect the deletion themselves after the mobile phone was submitted for review.
On this basis, the Commission has concluded that an overall fine amounting to 0.3% of IFF's total turnover would be both proportionate and deterrent. At the same time, the Commission has decided to reward IFF for its proactive cooperation during and after the inspection. It has therefore decided to reduce such fine amount by 50% and to impose a fine of €15.9 million, which represents 0.15% of IFF's total turnover.
This is the first Commission decision imposing a fine for the deletion of messages exchanged via social media apps (WhatsApp) on a mobile telephone.
The Commission's investigation into the fragrance industry (AT.40826) is still ongoing and is unrelated to this decision.
Background
Regulation No 1/2003 empowers the Commission to conduct inspections at the premises of companies suspected of breaching EU competition rules. Companies are required to submit to inspections ordered by Commission decisions and shall act with particular diligence and take all appropriate measures in order to preserve the evidence available to them. Inspectors are empowered to examine and take copies of books and records related to the business, irrespective of the medium on which they are stored.
The Commission inspection team includes Forensic IT experts that use cutting-edge Forensic tools to detect any deletion or manipulation of electronic information during inspections. The Commission is continuously investing in its forensic capabilities, including up-to-date software and hardware, to detect the deletion or tampering of information during inspections.
The cooperation procedure is inspired by the well-established cartel settlements procedure and can be used in other situations where companies are willing to acknowledge their liability for an infringement of the EU competition rules (including the facts and legal qualification). The cooperation framework allows the Commission to apply a simpler and faster procedure and the cooperating companies to obtain a reduction in fines.
