The European Commission has fined International Flavors & Fragrances Inc. and International Flavors & Fragrances IFF France SAS (together "IFF") €15.9 million ($17 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.
Margrethe Vestager, Executive Vice-President in charge of competition policy said, "Compliance with antitrust investigations is of paramount importance. Companies that undergo an inspection must ensure that employees do not delete or manipulate business records. This includes communications on mobile phones. Today’s 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."
In March 2023, the Commission carried out unannounced inspections of the premises of suppliers and one association active in the fragrance industry in numerous member states. Those involved include Swiss companies Firmenich International SA, Givaudan SA, Symrise AG, and the US group International Flavors & Fragrances Inc. Collectively, they possess an estimated 60% market share with combined annual revenue of over $21 billion.
Concurrently, the Commission sent out formal requests for information to several companies. The intent of both actions is related to possible collusion in the supply of fragrances and fragrance ingredients related to potential overcharging and other anti-competitive practices. The Commission is concerned about companies violating EU antitrust rules prohibiting cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union). Commission officials have also consulted their counterparts in the Antitrust Division of the US Department of Justice, the UK Competition and Markets Authority, and the Swiss Competition Commission.
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 occurred after the employee had been informed about the Commission's inspection.
After the detection, IFF immediately acknowledged the facts and proactively cooperated by helping the Commission recover the deleted data. The Commission opened proceedings against IFF for obstructing its investigation in March 2024. IFF agreed to pay the European Commission a €15.9M ($17 million) fine to settle a charge.
IFF said in a statement that when the investigation began in March 2023, a now-former employee deleted messages relevant to the investigation from their mobile phone, contrary to the explicit instructions of IFF’s Legal Department and the Commission.
On this basis, the Commission has concluded that an overall fine of 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 impose a fine of €15.9 million ($17 million), representing 0.15% of IFF's total turnover.
