Legal Alert – The Finnish Competition Authority Empowered to Obtain Information from Cloud Service Providers
Proposed clarification regarding the Competition and Consumer Authoritys inspection rights will oblige cloud and other third party service providers to provide information associated costs to be paid by the companies under inspection.
The Finnish Government has submitted a bill (HE 253/2014 vp) to Parliament which amends the Competition Act. The proposed amendment aims to clarify the Finnish Competition and Consumer Authoritys (FCCA) right to access information during inspections. The FCCA will have the right to access information, including e-mails and back-up files, which are currently held by a third party as part of an outsourcing or other arrangement. The third party service provider will be obliged to provide the requested information directly to the FCCA. Any costs arising out of the provision of information will be paid by the company under inspection, unless the parties agree otherwise.
The third parties which will be obliged to provide information to the FCCA include a variety of service providers offering e.g. cloud and storage services. The obligation covers all service providers regardless of their place of business and even extends to service providers located outside the EU.
The proposed amendment aims to clarify the current practice. The FCCAs right to access information would not depend on whether the company has outsourced its IT services to a third party. Furthermore, in order to treat companies equally regardless of the possible outsourcing, the proposal includes a presumption that the company under inspection is responsible for the costs related to the provision of information. Our experience is that these costs can be significant.
The FCCA will be able to access information without consent from the persons whose data is being investigated and without the need to address a formal inspection order to the third party service provider.
The bill has now been sent to the Finance Committee of the Parliament for statement. The Government bill (in Finnish):
The EU General Court judgment confirms the European Commissions inspection powers in relation to electronic searches: