Nuctech Warsaw Company Limited and Nuctech Netherlands v Commission (Foreign subsidies - Inspections within the European Union - Order) [2024] EUECJ T-284/24

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(Interim relief – Foreign subsidies – Inspections within the European Union – Regulation (EU) 2022/2560 – Application for suspension of operation of a measure – No urgency – No prima facie case – Weighing up of interests)

European Commission, represented by L. Flynn, M. Farley and A.‑L. Delbac, acting as Agents,

1 By their application under Articles 278 and 279 TFEU, the applicants, Nuctech Warsaw Company Limited sp. z o.o. and Nuctech Netherlands BV, seek the suspension of operation of the decision of the European Commission of 16 April 2024 requiring an undertaking active in the threat detection systems sector to submit to inspections pursuant to Article 14(3) of Regulation (EU) 2022/2560 (Case FS.100068 – MARE) (‘the contested decision’) and any subsequent acts or requests based on it.

2 The applicants are active in the development, production and supply of security inspection equipment and after-sale services of that equipment.

3 The applicants are wholly owned subsidiaries of Nuctech Hong Kong Co. Ltd, a company registered in Hong Kong (China). Nuctech Hong Kong is ultimately controlled by Tsinghua Tongfang Co. Limited, a company registered in China and listed on the Shanghai Stock Exchange (China). Tsinghua Tongfang also controls Tongfang Nuctech Technology Co., Ltd., a company registered in China.

4 On 16 April 2024, the European Commission adopted the contested decision, ordering an inspection pursuant to Article 14(3) of Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market (OJ 2022 L 330, p. 1).

5 Between 23 and 26 April 2024, the Commission carried out an inspection at the applicants’ premises.

6 During those inspections, the Commission requested the content of a number of employees’ mailboxes.

7 In response to the Commission’s request, the applicants informed it that the electronic correspondence of the employees at issue, who are citizens of the People’s Republic of China, was not stored on local servers but on their parent company’s servers, established in China.

8 The Commission requested the applicants to place a legal hold on the mailboxes of the employees whose data are on the servers located in China.

9 By email of 8 May 2024, the Commission informed the applicants that the requests concerning the provision of the data during those inspections remained valid and urged them to take all necessary steps to make the data available to the Commission as quickly as possible, and at the latest on the date of the start of the continued inspection, which was subsequently set on 27 May 2024.

10 By application lodged at the Court Registry on 29 May 2024, the applicants brought an action seeking, inter alia, the annulment of the contested decision and of any subsequent act or request by the Commission and of the legal hold requests, including the information request concerning data stored in China.

11 By separate document lodged at the Court Registry on the same day, the applicants brought the present application for interim measures, in which they claim that the President of the General Court should:

– order the suspension of operation of the contested decision, together with any subsequent act or request by the Commission and the legal hold requests, including the information request concerning data stored in China;

12 In its observations on the application for interim measures, lodged at the Court Registry on 14 June 2024, the Commission contends, in essence, that the President of the General Court should:

13 It is apparent from reading Articles 278 and 279 TFEU together with Article 256(1) TFEU that the judge hearing an application for interim measures may, if he or she considers that the circumstances so require, order that the operation of a measure challenged before the General Court be suspended or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure of the General Court. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only exceptionally that the judge hearing an application for interim measures may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12).

14 The first sentence of Article 156(4) of the Rules of Procedure provides that applications for interim measures are to state ‘the subject matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measure applied for’.

15 The judge hearing an application for interim relief may thus order the suspension of operation of an act and other interim measures if it is established that such an order is justified, prima facie, in fact and in law, and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main action. Those conditions are cumulative, and consequently an application for interim measures must be dismissed if any one of them is not satisfied. The judge hearing an application for interim relief is also to undertake, when necessary, a weighing of the competing interests (see order of 2 March 2016, Evonik Degussa v Commission, C‑162/15 P‑R, EU:C:2016:142, paragraph 21 and the case-law cited).

16 In the context of that overall examination, the court hearing the application for interim measures enjoys a broad discretion and is free to determine, having regard to the particular circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre-established scheme of analysis within which the need to order interim measures must be assessed (see order of 19 July 2012, Akhras v Council, C‑110/12 P(R), not published, EU:C:2012:507, paragraph 23 and the case-law cited).

17 Having regard to the material in the case file, the President of the General Court considers that he has all the information needed to rule on the present application for interim measures without there being any need first to hear oral argument from the parties.

18 According to settled case-law, the fumus boni juris requirement is met where at least one of the pleas in law relied on by the applicant for interim measures in support of the main action appears, prima facie, not unfounded. That is the case, inter alia, where one of the pleas relied on reveals the existence of complex issues of law the solution to which is not immediately obvious and therefore calls for a detailed examination that cannot be carried out by the court hearing the application for interim relief but must be the subject of the main proceedings, or where the discussion of issues by the parties reveals that there is a major legal disagreement whose resolution is not immediately obvious (see order of 24 May 2022, Puigdemont i Casamajó and Others v Parliament and Spain, C‑629/21 P(R), EU:C:2022:413, paragraph 188 and the case-law cited).

19 In order to show that the contested decision is, prima facie, unlawful, the applicants rely on five pleas in law put forward in support of the main action.

20 By their first plea, the applicants argue that the Commission has infringed EU law and public international law by compelling them to produce documents stored on servers located in China.

21 First, according to the applicants, the Commission’s request concerning the documents located in China infringes public international law. The Commission cannot extend its investigatory powers to territories or individuals that are not under its EU jurisdiction.

22 Secondly, the applicants note that, in the present case, the Commission, for the first time, sought to extend its investigatory powers in an ex officio investigation to information located in the territory of a third country.

23 Thirdly, the applicants maintain that Article 14(2)(b) of Regulation 2022/2560 does not authorise the Commission to examine or request documents that are not ‘accessible to the entity subject to the inspection’.

24 By their second plea, the applicants claim that the contested decision is unlawful in so far as compliance with that decision would compel the applicants and the group to which they belong, under the threat of fines and periodic penalty payments, to infringe Chinese law, including criminal law.

25 By their third plea, the applicants assert that the contested decision infringes their right to inviolability of business premises and to privacy.

26 By their fourth plea, the applicants submit that the contested decision is arbitrary because the Commission did not have sufficient evidence to suspect the applicants of having received foreign subsidies leading to a distortion of competition in the internal market.

27 By their fifth plea, the applicants argue that the contested decision infringes Article 14(3) of Regulation 2022/2560, the Commission’s obligation to state reasons under the second paragraph of Article 296 TFEU, and their rights of defence.

29 In that regard, as a preliminary point, it must be stated that, as regards the third, fourth and fifth pleas, in their application for interim measures, the applicants confine themselves to a mere statement of those pleas.

30 A single-sentence description of a plea, which is merely an assertion, is insufficient to discharge the applicants’ burden of establishing the existence of a prima facie case with respect to the pleas concerned. Accordingly, given that the application for interim measures contains no evidence establishing the existence of a sufficient probability that the condition relating to the establishment of a prima facie case is satisfied as regards the third, fourth and fifth pleas, it is impossible for the Commission to prepare substantive observations on those pleas or for the judge hearing the application for interim measures to assess whether those pleas were prima facie well founded.

31 It follows from the case-law that an application for interim measures must be sufficiently clear and precise in itself to enable the defendant to prepare its observations and the judge hearing the application to give a ruling, where necessary, without other supporting information, it being necessary for the essential facts and points of law on which the applicant relies to be set out in a coherent and comprehensible fashion in the actual application (orders of 30 April 2010, Ziegler v Commission, C‑113/09 P(R), not published, EU:C:2010:242, paragraph 13, and of 7 March 2013, EDF v Commission, C‑551/12 P(R), EU:C:2013:157, paragraph 39).

32 Consequently, the mere statement of the third, fourth and fifth pleas does not meet the requirements of Article 156(4) of the Rules of Procedure, pursuant to which applications for interim measures are to state, inter alia, the pleas of fact and of law establishing a prima facie case for the interim measure applied for.

34 As regards the first and second pleas, it must be stated that they are not capable of establishing, to the requisite legal standard, the existence of a prima facie case.

35 In the first place, as regards the first plea, it must be noted at the outset that the Commission’s approach consisting in addressing an inspection decision to an undertaking incorporated outside the European Union but which operates in the European Union, and carrying out inspections at that undertaking’s premises located in the European Union is not novel. That approach has been endorsed on numerous occasions on the basis of Article 20 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1), which contains the equivalent provisions to those laid down in Article 14 of Regulation 2022/2560.

36 It follows from the case-law applicable in matters of competition law that, in order to justify the Commission’s jurisdiction under public international law, it is sufficient to establish either the qualified effects of the practice in the European Union or that it was implemented in the European Union (see, to that effect, judgment of 12 June 2014, Intel v Commission, T‑286/09, EU:T:2014:547, paragraph 244).

37 In order to justify the application of the implementation test, the Court has emphasised that if the applicability of prohibitions laid down under EU law were made to depend on the place where the practice was formed, the result would obviously be to give undertakings an easy means of evading those prohibitions (see, by analogy, judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraph 44 and the case-law cited).

38 The qualified effects test pursues the same objective, namely preventing conduct which, while not adopted within the European Union, has effects liable to have an impact on the EU market (see, to that effect, judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraph 45).

39 The application of EU law to the conduct of undertakings is legitimate, regardless of where it takes place, in so far as that conduct has foreseeable, immediate and substantial effects in the European Union (see, to that effect, judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraphs 40 to 47).

40 It follows from the foregoing that the Commission must also be entitled to request information from undertakings located outside the European Union in order to assess whether their conduct infringes EU law and is likely to produce a substantial effect on the internal market. That applies particularly in respect of distortions of competition in that market caused by foreign subsidies referred to in Article 1 of Regulation 2022/2560.

41 If the Commission did not have such a right, it would not be able to carry out its investigation effectively and this would jeopardise its ability to hold non-EU entities liable for conduct substantially affecting the internal market. Such a situation would also encourage entities established in the European Union to store their data outside the European Union in an attempt to thwart the Commission’s investigations.

42 Next, it must be held that the first plea concerns, as to the remainder, facts which occurred after the contested decision was adopted. They include, inter alia, requests for information made by the Commission inspectors to the applicants’ representatives during the inspections of their offices in Poland and in the Netherlands. As the Commission has correctly observed, the lawfulness of the contested decision must be assessed in the light of the facts and circumstances known at the moment when it was adopted and cannot therefore depend on subsequent events. However, even if those subsequent facts had to be taken into consideration, the applicants have not put forward any arguments which made it possible, prima facie, to find the existence of an infringement of a rule of EU law.

43 First, the applicants have neither explained nor substantiated their claim that they have no access to information stored on servers located in China. As the Commission contends, the applicants do not claim that they cannot access the requested information, in particular, from laptops connected to servers located in China. According to the applicants, since the information is stored in China, it is for their parent company and not for themselves to reply to a request concerning that information. It is also their parent company, established in China, which took the view that it had to take account of Chinese law in determining whether to provide the requested information to the Commission.

44 However, the applicants have not only failed to state the reason why they have no access to the requested information, but they also do not explain how Chinese law could prevent them, as entities established in the European Union, from responding to the Commission’s requests and why the provisions of Chinese law are relevant to them.

45 Secondly, as regards, in particular, the provisions of Chinese law laying down criminal sanctions, the Commission correctly noted that the applicants have failed to establish either that those provisions apply to the requested information or that they have sought to obtain the necessary authorisations for the purpose of transferring it to the Commission. Moreover, the applicants have not suggested other methods which would enable them to provide the information without infringing Chinese law.

46 In the second place, as regards the second plea, it must be held that the applicants confine themselves to putting forward, in an extremely laconic manner, mere general assertions, which do not make it possible for the judge hearing the application for interim measures to carry out a legal assessment of whether that plea is prima facie well founded.

47 Furthermore, it must be observed, as the Commission did, that the validity of the contested decision and any measure taken pursuant to that decision must be assessed in the light of EU law and not Chinese law.

48 It follows that, in so far as the applicants have not established an infringement of a rule of EU law, the contested decision and the measures taken to implement it could be called into question only if they infringed public international law. However, the applicants have not established, even by prima facie evidence, that that could be the case.

49 It follows from all the foregoing that, without in any way prejudging the Court’s position in the action in the main proceedings, it cannot be concluded that there is a prima facie case.

50 In order to determine whether the interim measures sought are urgent, it should be noted that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future final decision, in order to prevent a lacuna in the legal protection afforded by the EU judicature. To attain that objective, urgency must generally be assessed in the light of the need of an interlocutory order to avoid serious and irreparable damage to the party requesting the interim measure. That party must demonstrate that it cannot await the outcome of the main proceedings without suffering serious and irreparable damage (see order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27 and the case-law cited).

51 It is in the light of those criteria that it is necessary to examine whether the applicants have succeeded in demonstrating urgency.

52 In the present case, in order to demonstrate the serious and irreparable nature of the alleged harm, in the first place, the applicants argue that the continued inspection causes serious and irreparable damage to their reputation and their financial viability.

53 According to the applicants, the fact that they are subject to those inspections will cause reputational damage in a market in which there are very few players. The fact that they have been targeted by on-site inspections has been well-documented in the press.

54 Moreover, the applicants claim that the loss of opportunities to win tenders for contracts, and the award of those contracts to competitors, would cause irreparable harm. Ultimately, this could jeopardise their future financial viability. The fact that their financial viability may be at risk constitutes a valid ground for the grant of interim measures.

55 In the second place, the applicants submit that to comply with the Commission’s requests for information would compel them to disregard legal obligations imposed on them under Chinese law, including criminal law, namely Articles 31 and 36 of the Data Security Law, Article 41 of the Personal Information Protection Law and Article 28 of the Law on Safeguarding State Secrets. Thus, the group to which the applicants belong would be placed in the untenable situation of being subject to EU sanctions if it did not provide the Commission with the requested information located on servers in China, or potentially subject to criminal sanctions in China if it did provide the Commission with the requested information. According to the applicants, the damage which the present application for interim measures seeks to prevent is clearly serious and irreparable, and therefore satisfies the condition relating to urgency.

57 In that respect, in the first place, as regards the applicants’ argument concerning damage to their reputation, it cannot be endorsed as regards the non-material damage allegedly arising, in essence, from the serious and irreparable harm to their reputation resulting from the fact that they are subject to inspections.

58 First of all, according to the case-law, suspending the operation of a decision would not make good the damage to that reputation – if such damage is assumed to be established and to have essentially materialised – more than the possible future annulment of the decision at the end of the main action (see order of 17 February 2017, Janssen-Cases v Commission, T‑688/16 R, not published, EU:T:2017:107, paragraph 20 and the case-law cited).

59 In the present case, the harm that the applicants claim they are suffering stems from the impact that the media coverage of the inspection has allegedly had on their reputation.

60 Even though the contested decision is not public and the Commission has not disclosed the identity of the companies which were the subject of the inspections at issue, the press has reported on the inspections which took place at the applicants’ premises. It appears that it was the statements made by the Chamber of Commerce of the People’s Republic of China to the European Union and by the applicants themselves which made it possible to make the link with the inspection. Consequently, any alleged damage to their reputation already exists.

61 The purpose of proceedings for interim relief is not to repair damage which has already occurred (order of 8 May 2024, Lattanzio KIBS and Others v Commission, T‑113/24 R, not published, EU:T:2024:306, paragraph 24), since such damage cannot be prevented by the grant of the requested interim measures.

62 Should the applicants’ reputation indeed be compromised by the contested decision, it is settled case-law that its annulment on conclusion of the main proceedings would provide sufficient reparation for the alleged non-material harm (see, to that effect, orders of 25 March 1999, Willeme v Commission, C‑65/99 P(R), EU:C:1999:176, paragraphs 14, 61 and 62; of 22 July 2010, H v Council and Others, T‑271/10 R, not published, EU:T:2010:315, paragraph 36; and of 18 November 2011, EMA v Commission, T‑116/11 R, not published, EU:T:2011:681, paragraph 21).

63 In the second place, as regards the applicants’ argument that their financial viability could be threatened, it must held that the damage alleged is purely financial.

64 According to the case-law, where the harm referred to is of a financial nature, the interim measures sought are justified where, in the absence of those measures, the applicant would be in a position that would imperil its financial viability before final judgment is given in the main action, or if its market share would be affected substantially in the light of, inter alia, the size and turnover of its undertaking and, where appropriate, the characteristics of the group to which it belongs (see order of 12 June 2014, Commission v Rusal Armenal, C‑21/14 P‑R, EU:C:2014:1749, paragraph 46 and the case-law cited). Since imminent disappearance from the market does constitute damage that is both irremediable and serious, adoption of the interim measure sought appears justified in such a situation (order of 9 June 2010, Colt Télécommunications France v Commission, T‑79/10 R, not published, EU:T:2010:228, paragraph 37).

65 Furthermore, in accordance with settled case-law, damage of a pecuniary nature cannot, otherwise than in exceptional circumstances, be regarded as irreparable since, as a general rule, pecuniary compensation is capable of restoring the aggrieved person to the situation that obtained before he or she suffered the damage. Any such damage could be recouped by the applicant’s bringing an action for compensation on the basis of Articles 268 and 340 TFEU (see order of 23 April 2015, Commission v Vanbreda Risk & Benefits, C‑35/15 P(R), EU:C:2015:275, paragraph 24 and the case-law cited).

66 It is also settled case-law that, in order to assess whether the alleged damage is of a serious and irreparable nature therefore justifying the suspension, exceptionally, of the operation of the act at issue, the judge hearing the application for interim measures must, in all cases, have specific and precise information, supported by detailed, certified documentary evidence, which shows the situation in which the party seeking the interim measures finds itself and enables the probable consequences, should the measures sought not be granted, to be assessed. It follows that that party, in particular, when it relies on the occurrence of financial damage, must in principle produce, with supporting documentation, an accurate overall picture of its financial situation (see, to that effect, order of 10 July 2018, Synergy Hellas v Commission, T‑244/18 R, not published, EU:T:2018:422, paragraph 27 and the case-law cited).

67 In the present case, it must be stated that the applicants neither establish nor even claim that they are in a position that would imperil their financial viability before final judgment is given in the main action, in the light of their size, their turnover and the characteristics of the group to which they belong.

68 The applicants provide no figures regarding the financial situation of the group of companies to which they belong, from accounts or otherwise, capable of substantiating the existence of serious and irreparable damage.

69 In the third place, as regards the applicants’ argument that complying with the contested decision and the related request for information would put the group to which they belong and their representatives at risk of criminal sanctions in China, it must be stated that the applicants refer, in their application for interim measures, to a number of specific provisions of Chinese law.

70 In that respect, it must be noted that each of the specific provisions of Chinese law listed in the application for interim measures could be infringed only if the data requested by the Commission were disclosed without the necessary prior authorisations granted by the competent Chinese authorities.

71 Moreover, it appears from the descriptions in the application for interim measures that, in the event of infringement of Chinese law, the applicable administrative penalties are generally pecuniary in nature. As stated in paragraph 65 above, such financial damage cannot, otherwise than in exceptional circumstances, be regarded as irreparable, since it may be the subject of subsequent financial compensation. In addition, the applicants have failed to demonstrate that the sanctions to which they could be subject are such as to imperil their financial viability before final judgment is given in the main action, in the light, in particular, of their size and their turnover and of those of their parent company, as well as the characteristics of the group to which they belong.

72 As regards, in particular, the provisions of Chinese law setting out criminal sanctions, it follows from the application for interim measures that Article 28 of the Law on Safeguarding State Secrets provides that if the requested data contain State secrets, the company at issue cannot export the requested data stored in China or disclose them to the Commission without approval by the competent authority under the Law on Safeguarding State Secrets. In the present case, an infringement of Article 28 exposes both the undertaking’s representatives to administrative penalties and the persons directly responsible for the failure to comply with those provisions to criminal sanctions of up to seven years of imprisonment.

73 However, as the Commission notes, the applicants have failed to demonstrate that any of the mailboxes at issue actually contain State secrets, or, if those mailboxes do contain State secrets, that the applicants or their parent company have taken the necessary steps to obtain the required authorisations for their disclosure and that such a request has been refused. Consequently, the applicants have failed to demonstrate that the Commission’s requests compel them to commit a criminal offence and that they therefore risk suffering serious and irreparable damage.

74 It follows from the foregoing that, in the light of the evidence submitted to the judge hearing the application for interim measures, it must be held that the applicants have not established to the requisite legal standard that they would be compelled, in order to give effect to the contested decision, to take actions in respect of which they would probably incur criminal liability and, consequently, be subject to criminal sanctions.

75 In view of the foregoing considerations, it must be found that the condition relating to urgency is not satisfied in the present case, since the likelihood of the applicants suffering serious and irreparable damage has not been established to the requisite legal standard.

76 According to settled case-law, the weighing up of interests requires the judge hearing the application for interim measures to determine whether or not the applicant’s interest in obtaining the interim measures sought outweighs the interest in the immediate application of the contested measure by examining, more specifically, whether the possible annulment of that measure by the Court when ruling on the main application would allow the situation which would have been brought about by its immediate operation to be reversed, and, conversely, whether suspension of operation of the measure would prevent it from being fully effective in the event of the main application being dismissed (see order of 26 June 2003, Belgium and Forum 187 v Commission, C‑182/03 R and C‑217/03 R, EU:C:2003:385, paragraph 142 and the case-law cited).

77 As regards more particularly the condition that the legal situation created by an interim relief order must be reversible, it must be recalled that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future decision on the main action. Consequently, that procedure is merely ancillary to the main action to which it is an adjunct, and accordingly the decision made by the judge hearing an application for interim relief must be provisional in the sense that it cannot either prejudge the future decision on the substance of the case or render it illusory by depriving it of practical effect (see order of 1 September 2015, Pari Pharma v EMA, T‑235/15 R, EU:T:2015:587, paragraph 65 and the case-law cited).

78 In the present case, it is necessary to weigh, on the one hand, the interest in preventing the alleged damage that might arise from the fact that the applicants are compelled, in order to give effect to the contested decision, to take actions in respect of which they may incur legal liability, including criminal liability, and, consequently, be subject to administrative penalties and criminal sanctions and, on the other, the public interest in preserving the effectiveness of EU law.

79 In that respect, as regards the applicants’ interests, it must be borne in mind, as a preliminary point that, according to Article 14(3) of Regulation 2022/2560, entitled ‘Inspections within the Union’, the undertaking or association of undertakings is to submit to inspections ordered by decision of the Commission.

80 In the present case, first, it must be stated that the applicants and their parent company have chosen to carry out commercial activities in the internal market of the European Union. Like any other economic operator, they are therefore subject to the EU rules which govern the functioning of that market. If the Commission seeks to assess whether those rules are being complied with by means of inspections, such as those provided for in Article 20 of Regulation No 1/2003, or, as in the present case, in Article 14 of Regulation 2022/2560, the applicants cannot, in principle, rely on the rules of a third State to object to the application of EU law to which they intentionally submitted.

81 Secondly, even if the risks arising from the application of the law of a third State had exceptionally to be weighed against the need to ensure compliance with EU law, the inspection ordered by the contested decision concerns information on the professional mailboxes which the applicants’ employees or officers use in carrying out their daily business-related tasks in the European Union.

82 Although the applicants are at liberty to choose the location where they store their information, they cannot rely on that liberty to refuse the Commission access to information that passes through those mailboxes.

83 Thirdly, it must be observed that, as the Commission submits, the applicants have not explained why the mere fact that the information is stored on servers in China would entail the application of provisions of Chinese law, including criminal law, and would prevent the Commission from obtaining information accessible to entities which are established in the European Union and carry out their activities in the territory of the European Union, via the mailboxes of those entities’ employees or officers.

84 Fourthly, as mentioned in paragraph 71 above, it follows from the descriptions in the application for interim measures that, in the event of infringement of Chinese law, the applicable administrative penalties are generally pecuniary in nature. As regards, in particular, the provisions of Chinese law setting out criminal sanctions, the applicants have not demonstrated that the mailboxes at issue actually contain State secrets, or, if those mailboxes do contain State secrets, that the applicants or their parent company have taken the necessary steps to obtain the required authorisations for their disclosure and that such a request has been refused.

85 On the other hand, as regards the Commission’s interests, it must be borne in mind that its task is to ensure that the conditions of competition within the European Union’s internal market are not distorted. As referred to in paragraph 41 above, the Commission must therefore be entitled to carry out its investigations effectively and to request information from all undertakings which carry out commercial activities in the European Union, whether they are controlled by entities in the Member States or in third States, in order to assess whether their conduct in that market infringes EU law. If that were not the case, undertakings controlled from third States would benefit from a competitive and procedural advantage compared with those which are controlled by entities located inside the European Union.

86 As regards, more precisely, access to data which pass through mailboxes used by employees of companies controlled from third States in carrying out their business-related tasks within the European Union, it must also be noted that the proper conduct of Commission investigations could be compromised if those companies could evade requests for information by deciding to store their data outside the European Union.

87 It follows from the foregoing that the interest defended by the Commission must prevail over the applicants’ interest.

88 In the light of all the foregoing, the present application for interim measures must be dismissed.

89 Under Article 158(5) of the Rules of Procedure, the costs are to be reserved.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Nuctech Warsaw Company Limited and Nuctech Netherlands v Commission (Foreign subsidies - Inspections within the European Union - Order) [2024] EUECJ T-284/24_CO (12 August 2024) URL: http://www.bailii.org/eu/cases/EUECJ/2024/T28424_CO.html Cite as: [2024] EUECJ T-284/24_CO, EU:T:2024:564, ECLI:EU:T:2024:564

Court of Justice of the European Communities (including Court of First Instance Decisions)