## Facts

- The European Commission adopted a decision under Article 14(3) of Regulation No. 17 ordering an on-site competition investigation at Hoechst AG’s business premises.
- The decision required Hoechst to admit Commission officials, permit inspection and copying of specified business records, and provide on-the-spot explanations.
- Hoechst refused to comply, arguing the measure amounted to an unlawful search that violated fundamental rights.
- The Commission warned it would impose periodic penalty payments for continued non-compliance.
- A request for interim relief against the investigation decision was denied; national authorities later assisted enforcement through a domestic warrant under national procedure.
- The Commission adopted a decision imposing periodic penalty payments and later fixed a definitive amount of ECU 55,000.
- Hoechst filed two annulment actions: one challenging the investigation decision and another challenging (or alternatively seeking amendment of) the penalty decision; the cases were joined.

## Issues

1. Whether fundamental rights protecting the inviolability of the home limit Commission inspection powers as applied to an undertaking’s business premises.
2. Whether Article 14 inspection powers (entry, document review/copying, and requests for explanations) are compatible with general principles of Community law, including proportionality and rights of defence.
3. Whether Article 14’s procedural safeguards and the division of review between Community courts and national courts provide adequate legal protection against arbitrary intervention.
4. Whether the Commission complied with required defence rights and procedural steps before fixing the definitive amount of periodic penalty payments.

## Decision

- The Court upheld the Commission’s investigation decision and rejected Hoechst’s annulment action as to that decision.
- The Court held that classical “inviolability of the home” protection tied to private and family life does not apply to undertakings’ business premises in the same manner.
- The Court confirmed undertakings are nonetheless protected against arbitrary or disproportionate investigative measures through legality, reasoning requirements, proportionality, and judicial review.
- The Court held Article 14 inspection powers are valid and may be exercised when the decision specifies the subject matter and purpose and is subject to review.
- The Court confirmed rights of defence apply already at the inspection (preliminary inquiry) stage, but found no infringement on the facts concerning the inspection decision.
- The Court annulled/amended the penalty decision to the extent the Commission fixed the definitive penalty amount without required procedural safeguards, while confirming the Commission may impose periodic penalties in principle to compel compliance.

## Legal Principles

- Fundamental rights form part of the general principles of Community law; enforcement measures must be interpreted and applied consistently with those principles.
- The fundamental right to inviolability of the home, as developed for natural persons’ private sphere, is not directly transposable to undertakings’ business premises; protection for undertakings operates through limits against arbitrariness and disproportionality.
- Commission inspection decisions must state reasons appropriate to the investigatory stage and must specify the subject matter and purpose sufficiently to permit understanding and judicial review, without requiring a fully detailed merits case.
- Rights of defence are a fundamental principle applicable not only to penalty stages but also to preliminary investigative procedures, within the constraints of the investigatory function.
- When an undertaking resists an inspection, national authorities may assist under national procedural law; national courts review national implementing measures but do not rule on the validity of the Commission decision itself, which is reviewable by the Community court.
- Before fixing the definitive amount of a periodic penalty payment for non-compliance, the undertaking must be heard and the required consultative procedure must be completed; failure can invalidate the definitive quantification.

## Conclusion

The Court validated the Commission’s competition inspection regime as applied to undertakings, rejecting a company-level “home” right bar while requiring reasoned, proportionate measures subject to judicial control, and it set aside the definitive penalty amount because the Commission did not follow required hearing and consultation steps when fixing it.


Hoechst AG v. Comm’n of the Eur. Cmtys., Joined Cases 46/87 & 227/88, [1989] E.C.R. 2859 (ECJ 1989)