AI-assisted analysis of companies’ public communications triggers EU Commission’s antitrust Dawn Raids

The General Court has recently handed down its judgment in Michelin v. European Commission (T-188/24), clarifying the limits of the European Commission’s (“Commission”) investigatory powers to conduct unannounced inspections of corporate premises (so-called “Dawn Raid”). The Commission analysed public information using (AI-)screening tools. The judgment is also a reminder for companies to reassess the content of any public strategic- or price-related communications. The General Court emphasised that such statements may be subject to review under EU competition law even if they comply with other transparency obligations.

Background

The case involved an appeal by Michelin to the General Court following the Commission’s investigation into alleged anticompetitive practices. The Commission suspected that several companies in the tire industry, including Michelin, may have used public communications to signal and thus coordinate their future sales prices without any explicit agreement.

The Commission conducted a Dawn Raid on the premises of Michelin and several other tire companies in January 2024 (see press release). In the Commission’s view, the Artificial Intelligence-assisted analysis of hundreds of thousands of public statements and earnings calls involving the communications of the companies’ financial results and projections (e.g. on future wholesale prices), including a manual review of the screening exercise’s findings, provided sufficient evidence of potential infringements to justify conducting the Dawn Raid. Michelin contested the Commission’s inspection decision and based its appeal on the grounds that the Commission’s justifications were: (i) too succinct, generic, vague, and ambiguous, and (ii) lacking sufficiently serious evidence to enable it to suspect antitrust violations.

General Court clarifies that initiating a Dawn Raid requires sufficiently serious indicia and clear articulation of the allegations

The General Court decided to partially annul the Commission’s decision, splitting the investigation into two distinct time periods: while holding that the Commission had gathered sufficient evidence to support the decision to conduct the Dawn Raid regarding Michelin’s alleged wrongdoing in more recent years, it found that the Commission had erred in deploying the Dawn Raid regarding the earlier period under investigation.

The General Court acknowledged that a Dawn Raid forms part of the early investigative phase and that the Commission is therefore not required to present final evidence or a final legal assessment of the conduct under investigation to initiate a Dawn Raid. Nevertheless, the General Court emphasised two major points:

• Firstly, the Commission needs to have sufficiently serious indicia that plausibly indicate the alleged infringement before initiating a Dawn Raid, and those indicia must specifically relate to the time period under investigation.
• Secondly, the Commission must clearly articulate its suspicions. While it may use flexible drafting language, including words like “and/or”, “notably” or “at least”, the targeted company must still be able to clearly understand the scope of the investigation.

General Court paves the way for AI-assisted screening of public communications to identify potential infringements of EU competition law

The General Court implicitly validated the use of AI to screen public information as a primary basis for initiating investigations and Dawn Raids.

Of particular note, the General Court treated favourably the Commission’s submission that companies’ public statements as well as certain phrases in earnings calls indicating that the market is “congruent” and “sufficiently disciplined” may amount to signalling and could even constitute a “unilateral invitation to collusion” if intended to coordinate future conduct among competitors. Signalling is defined by the General Court as the “intentional use of companies' public communications to inform each other of their respective future pricing intentions and strategies in order to influence their respective pricing policies”.

The General Court held that if public communications lead to competitors adapting their market behaviour accordingly, the publication may even qualify as a “by object” infringement under the EU cartel prohibition. The “by object” qualification means an authority does not need to find actual effects of the conduct on competition. This echoes the European Court of Justice’s strict approach in a much-noticed judgment, where it was held that even a single information exchange between two companies may qualify as a restriction by object (see NOERR insights).

Furthermore, the General Court pointed out that complying with capital market transparency obligations does not shield public statements from the application of EU competition law. However, companies can reduce the risk of becoming a party to collusion by publicly distancing themselves from competitors’ public communications or by reporting them to the public authorities.

Implications: Companies should prepare for closer monitoring of public communications from an antitrust perspective

Although the General Court did not rule on whether Michelin’s practice under investigation qualifies as an infringement of EU competition law, the judgment should be seen as a warning, especially for executive management and teams responsible for public or investor relations.

Four key takeaways:

• The Commission emphasised multiple times over the last years that it intends to strengthen its ex officio investigation capabilities. This case illustrates that the Commission now has the tools to analyse extensive amounts of publicly available data indicating that we will see more such cases going forward.
• The judgment offers companies a line of defence against Dawn Raids. While the threshold “sufficiently serious indicia” still needs to be contoured further in this context, this threshold is not a mere formality and prevents the Commission from going on fishing expeditions.
• The judgment also gives little guidance on when a public communication is considered anticompetitive signalling or even a “unilateral invitation to collusion”. While general statements about market conditions without any specific reference to future (pricing) strategy would likely not suffice, the judgment indicates that any public communication involving strategic information could be considered anticompetitive, depending on the concrete wording accompanying the communication as well as on specific market’s structure and communication practices.
• Companies should closely evaluate their practice of publishing information on matters with strategic relevance or prices that may impact competitors’ market conduct – even if legally obliged to publicly communicate certain information. This includes establishing clear internal communication protocols and ensuring that public statements related to pricing or strategy are checked for compliance with EU competition law.