- The European Commission has launched EU raids on data centre builders to investigate suspected anti-competitive practices, particularly no-poach agreements.
- Companies found guilty could face significant fines, but may avoid penalties through the Commission’s leniency programme by cooperating and disclosing their involvement.
In an unexpected move, the European Commission is cracking down on potential anti-competitive behaviour in the data centre construction sector. The Commission has launched EU raids on data centre builders, targeting suspected violations of EU antitrust rules—specifically, no-poach agreements between companies.
What happened
The European Commission, in collaboration with national competition authorities, has initiated a series of EU raids on data centre companies across Europe. These actions come as part of a preliminary investigation into possible anti-competitive behaviour, specifically focusing on no-poach agreements—where companies agree not to hire or solicit each other’s employees. The inspections, known as “dawn raids,” are designed to gather evidence of collusion and restrictive practices that could harm the labour market and client interests.
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Under EU regulations, such agreements are prohibited by Article 101 of the Treaty on the Functioning of the European Union, as they limit competition, reduce worker mobility, and inflate operational costs. The Commission has also issued formal information requests to additional companies within the sector, seeking further clarification on their practices. While no legal deadline exists for the investigation’s completion, the case timeline will depend on the complexity of the situation and the level of cooperation from the involved companies.
Why this is important
The ramifications of these investigations could be significant, both for the companies involved and for the wider business community. If found guilty of violating EU competition laws, these firms could face hefty fines, alongside reputational damage. The Commission’s leniency programme, however, offers a potential route out for companies willing to disclose their involvement in anti-competitive practices. Those who cooperate with the investigation could be granted immunity or reduced penalties.
For employees, this investigation highlights the critical role of whistleblowing in tackling cartel-like behaviour. The European Commission encourages individuals, including workers who may be aware of no-poach or wage-fixing agreements, to report these violations anonymously. These steps ensure that antitrust practices are kept in check, safeguarding both the labour market and fair competition within the EU data centre construction sector.
