On 9 July 2025, the General Court of the European Union delivered its judgment in Case T-188/24 Michelin, addressing the scope of the European Commission’s powers to conduct on-site inspections (so-called dawn raids) under EU competition law. The Court broadly confirmed the Commission’s powers but sided with the claimant in partially annulling the Commission’s inspection decision, highlighting the requirement for a sufficient statement of reasons before the Commission may search companies’ premises. This judgement also gives insights into the European Commission’s increased efforts to uncover anticompetitive conduct ex officio in the context of a significant reduction of immunity/leniency applications.
Context
On 30 January 2024, the European Commission carried out unannounced inspections at the premises of several tyre manufacturers located in various EU Member States (see: Unannounced antitrust inspections in the tyres sector). These inspections, conducted in cooperation with national competition authorities, were part of a preliminary investigation into suspected infringements of Article 101 TFEU, which prohibits anti-competitive agreements, notably cartels.
The investigation concerns new replacement tyres for passenger cars, vans, trucks, and buses sold within the European Economic Area. The Commission suspects that major tyre manufacturers may have coordinated their pricing strategies, possibly through public channels like earnings calls, and potentially with the involvement of trade associations. The Commission suspects that the companies under investigation may have exchanged pricing information through such public communications or with the support of industry bodies.
Michelin challenged the legality of the decision ordering it to submit to an inspection pursuant to Article 20(4) of Regulation No 1/2003. The company raised two pleas in law (i) an alleged infringement of Article 296 TFEU and Article 20(4) of Regulation No 1/2003, on the grounds that the contested decision was insufficiently reasoned and (ii) a breach of the right to respect for private life, arguing that the decision was arbitrary and disproportionate.
In its Decision, the Commission had referred to two distinct time periods during which anticompetitive conduct may have occurred: “This conduct is believed to have started at least in [mentioned year], although it cannot be ruled out that it began earlier, and it may still be ongoing (hereinafter the "main period"). There are indications of prior coordination concerning these products at least [during an earlier period] (hereinafter the "prior period", which precedes the main period by several years)”.
It is this distinction between the main and earlier periods that resulted in the partial annulment of the EC’s decision. The judgement makes no findings in relation to the alleged infringement which remains subject to the European Commission’s ongoing investigation.
Judgment
The parts of the ruling assessed in this article appear in paragraphs 105 to 154, where the General Court undertakes a detailed assessment of the indicia invoked by the Commission to justify the contested inspection Decision. The two distinct periods are analysed by the General Court as follows.
1. Main period: sufficiently serious indicia, inspection Decision upheld
The Court recalls that price coordination among tyre manufacturers, if established, would constitute one of the most serious infringements of EU competition law. To justify its suspicions, the Commission relied on several pieces of evidence, including:
- Public statements and earnings calls: Major tyre manufacturers communicated future pricing strategies during earnings calls, potentially disclosing sensitive pricing intentions to competitors;
- Language and signals: Phrases such as “we want to send a signal” , “we aim to stick to...”, “we expect the industry to follow” or “we will maintain pricing discipline” were interpreted by the Commission as coded messages aimed at aligning market behaviour, especially during times of rising input costs;
- Synchronisation of pricing announcements: The Commission’s analysis revealed that competitors often announced price changes simultaneously or within close timeframes;
- Market correlation: Manufacturers responded in strikingly similar ways to changes in raw material prices, reinforcing suspicions of a parallel or coordinated pricing strategy.
Arguments suggesting that such language was generic or legally required were rejected by the Court as insufficient to disprove the plausibility of collusion. The Court emphasised that the legal test to justify dawn raids required the existence of indicia, not conclusive proof of an infringement. Accordingly, the Commission was entitled to consider that it had sufficient grounds to inspect companies’ premises in relation to the main period.
2. Earlier period: insufficient indicia, partial annulment
With respect to the earlier period, however, the Court found that the Commission had failed to present sufficiently serious indicia. Specifically:
- No evidence of earnings calls or direct contemporary statements corroborated the existence of any price signalling or coordinated strategies during that earlier timeframe;
- The Commission relied instead on retrospective references made during more recent earnings calls — which, according to the Court, did not constitute material and specific indicia of a past infringement, as they lacked any concrete reference to collusive intentions or strategies applicable to that earlier period;
- Despite conducting an extensive quantitative analysis of earnings calls, the Commission failed to identify any incriminating documents from the prior period, which further undermined the plausibility of its assumptions. As a result, in the absence of convincing evidence, the Commission’s interpretation that there were indicia of coordination taking place during the prior period was not sufficiently substantiated.
The Court therefore held that the inspection — in respect of the earlier period — was based on vague and speculative assumptions, amounting to an unjustified interference with Michelin’s fundamental right to respect for its premises, as protected by the EU Charter of Fundamental Rights.
Key Takeaways
The judgment of the General Court confirms the burden of proof the European Commission has to satisfy before deciding to conduct an inspection. Sufficiently serious and specific indicia of potential wrongdoing has to be established and set out in a dawn raid Decision for each time period the Commission seeks to investigate. Companies should carefully review the dawn raid Decision, ideally at the outset of a dawn raid which is a tall order in a moment where Commission officials are waiting to be granted access to business premises.
The ruling also serves as a reminder of the limits to the Commission’s investigative powers. During a dawn raid, if investigators uncover elements falling outside the original scope of the inspection, several scenarios may arise:
- If the newly discovered elements are connected to the subject matter of the initial investigation, they may be seized and used in the ongoing proceedings;
- If the elements concern a separate infringement, If inspectors copy and take an out-of-scope document, the practical consequences are minimal. Companies can ask the Commission to return the document after the inspection, but such requests are often ignored. The Commission must then either refrain from using the document or justify its use under the Deutsche Bahn or Almamet exceptions. However, companies cannot challenge this in court until the Commission issues a final decision in the case.
This case also gives rare insights into how the Commission’s enforcement practice has evolved. With immunity applications being at a record low the Commission now uses its own initiative to investigates market conduct and this case shows its ability to process vast amounts of available public data across many jurisdictions. As is apparent from the judgement the Commission built a database having analysed hundreds of thousands of earnings calls sourced from a financial data provider and conducted a keyword-based analysis. This involved two categories of two-word search terms: nearly 100 terms related to strategic business decisions (e.g., “price discipline”) and over 400 terms referring to competitors’ current or future behaviour (e.g., “industry following”). The quantitative analysis showed that while around half of the earnings calls contained none of these terms, those from the main tyre manufacturers featured a notably high number of matches. Based on these results, the Commission proceeded with a qualitative review, manually examining the relevant earnings calls to assess the context in which the flagged terms appeared. It was this qualitative assessment that, in the Commission’s view, revealed sufficient signs of possible price signalling and coordination to justify conducting dawn raids.
Another point to recall is that if an infringement is ultimately established for a period predating the one initially targeted, the Commission may extend the relevant duration of infringement in its final decision, provided that the companies concerned are given an opportunity to comment. This has a direct impact on limitation periods, as the five-year deadline set out in Article 25 may be interrupted or start anew upon the discovery of new evidence. A longer infringement period will also result in higher fines, as duration is a multiplying factor under the Commission’s fining guidelines.
Finally, this judgement confirms that all public statements by companies whether on their websites, in earning calls or otherwise will increasingly be subject to scrutiny by enforcement teams of competition authorities and their sophisticated IT tools. Companies should continue to have clear policies in place that ensure that language used and publications made are vetted to use correct language that does not raise any unjustified concerns.