IFF fined €15.9m by the EC for “obstructing” antitrust raid

By Kirsty Doolan

- Last updated on GMT

The EC's antitrust investigation into the fragrance industry is still ongoing (Image: Getty)
The EC's antitrust investigation into the fragrance industry is still ongoing (Image: Getty)

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The European Commission (EC) has issued a €15.9m fine to the ingredients company IFF for “obstructing” an inspection from regulators in 2023. The penalty had been lowered from the initial amount due to the company’s full cooperation on the matter.

International Flavors & Fragrances Inc. and International Flavors & Fragrances IFF France SAS (together ‘IFF'), along with other ingredients giants including Symrise, Firmenich, and Givaudan, had been on the European competition authorities’ radar (along with UK and Swiss regulators), due to suspected pricing collusion.

IFF's headquarters were raided by antitrust regulators in March 2023 and according to the Commission, during this inspection, a senior employee of IFF had intentionally deleted WhatsApp messages that had been exchanged with a competitor.  

The EC stated that after this was detected, IFF immediately acknowledged the facts and proactively cooperated with the Commission to 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.

An overall fine amounting to 0.3% of IFF's total turnover was issued. However, due to IFF’s "proactive cooperation during and after the inspection," the fine was reduced by 50% and will equate to €15.9m (0.15% of IFF's total turnover).

The EC said this is the first ever decision to impose a fine for the deletion of messages exchanged via social media apps (WhatsApp) on a mobile telephone.

“Compliance with antitrust investigations is of paramount importance,” stated executive VP in charge of competition policy," Margrethe Vestager.

“Companies that undergo an inspection must ensure that employees do not delete or manipulate business records. This includes communications on mobile phones. The decision to fine IFF shows that we will not tolerate any action that could impact the effectiveness of our investigations and that we firmly pursue and sanction any such obstructions.”

Commitment to ethical conduct

IFF, which co-operated fully with the EC throughout the investigation has released the following statement:

“IFF has agreed to pay the European Commission a €15.9m fine to settle a charge relating to the destruction of evidence during the Commission’s industry investigation of suspected anti-competitive conduct in the supply of fragrance and fragrance ingredients." 

"When the investigation began in March 2023, a now-former Scent employee deleted messages relevant to the investigation from their mobile phone, contrary to the explicit instructions of IFF’s Legal Department and the Commission.  IFF quickly helped the Commission recover the deleted messages."    

"This former employee’s actions – which violated IFF policy and legal guidance – are not tolerated. We stand firm in our commitment to ethical conduct and adherence to the law."

The Commission's antitrust investigation into the fragrance industry (AT.40826​) is still ongoing.

Breaching EU competition rules

The EC can conduct inspections at the premises of companies suspected of breaching EU competition rules according to Regulation No 1/2003​.

Companies are required to act with 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,” according to the EC.

The EC explained that the inspection team includes forensic IT experts that use cutting-edge tools to detect any deletion or manipulation of electronic information during inspections. The Commission stated that it is “continuously investing in its forensic capabilities, including up-to-date software and hardware, to detect the deletion or tampering of information during inspections.”

It said that 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.

Businesses can find more about this specific incident here​, and information about the wider context of this issue on the competition website​, or in the Commission's public case register​ under the case number AT.40882.

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