The Privileged Few: DG COMP rejects legal professional privilege for in-house counsel

LPP and the meaning of the Commission’s brief

In EU competition investigations, LPP protects communications with independent, EU-qualified external counsel. The distinction is clear: in-house advice is not protected. This principle is rooted in the Akzo case (C-550/07 P), decided 15 years ago by the European Court of Justice (ECJ), which itself built on the earlier AM & S Europe judgment from the 1980s (Case 155/79). The ECJ found that “the requirement as to the position and status as an independent lawyer, which must be fulfilled […], is based on a conception of the lawyer’s role as collaborating in the administration of justice and as being required to provide, in full independence and in the overriding interests of that cause, such legal assistance as the client needs.” Based on that reasoning, LPP at the European level was never granted to inhouse counsel, based on the assumption that their employment relationship to their client, by its nature, precludes the “full independence” criterion.

The brief coincides with the ongoing evaluation of the antitrust enforcement framework under Regulation 1/2003, the key regulation governing the Commission’s antitrust and cartel procedures. During the consultation period, some stakeholders urged a rethink of the Akzo position. Although policy briefs are authored by DG COMP staff and “do not necessarily” bind the institution, this one can be seen as a shot across the bow aimed at critics of the narrow interpretation of LPP protections.

The insiders’ view

What did the critics say? Feedback essentially called for a “contemporary understanding” of the in-house role, recognizing that in-house counsel are positioned to prevent infringements, not facilitate them.

Since the shift to self-assessment under Regulation 1/2003 – which largely leaves companies responsible for evaluating their own competition law compliance rather than seeking official approval – businesses have developed extensive compliance programs. According to consultation submissions, in-house lawyers now serve as “guardians of compliance.” From this perspective, denying privilege to in-house counsel’s advice discourages candid internal risk assessments and meaningful access to privileged legal counsel, thereby undermining the rights of defense and the ability to obtain frank legal advice.

Some critics also raised a competitiveness argument: in jurisdictions where in-house privilege exists (such as in the UK), internal investigations benefit from more comprehensive documentation and quicker escalation. Without such privilege, EU firms face structural constraints and are disadvantaged, particularly when seeking to utilize competition authorities’ leniency programs. The critique also emphasized efficiency concerns. Mandating external counsel whenever privilege is required leads to unnecessary costs and fragmentation, as external teams often provide episodic advice and lack the ongoing operational context needed to design, implement, and enforce enterprise-wide programs. The increase in internal investigations – modeled after practices in jurisdictions that recognize in-house privilege – heightens the need for confidential channels to gather facts, document findings, and brief management. Without a baseline of protected candor, the argument runs, documentation thins out, investigations slow, and companies must over-rely on externals for tasks that internal experts could perform more (cost) efficiently. Some stakeholders also invoked an emerging European consensus on in-house LPP.

Notably, most proponents did not advocate for a blanket privilege. Instead, they proposed a narrowly defined in-house LPP, aligned with external privilege: protection would apply only when employees seek legal advice from the legal function, and would also cover in-house audits. Simply copying the legal department on communications would not qualify for privilege under this concept. A sanctions regime and ethical frameworks – such as bar membership where available and rules mirroring those for external counsel – could deter any facilitation of wrongdoing.

A brief for the Defense (the Commission’s, to be precise)

Alas, the officials are not convinced.

The brief in particular undercuts the “everyone’s moving” narrative: according to the authors, only five member states clearly recognize some in-house LPP in competition investigations – and subject to various conditions. There is “no predominant trend.” The brief also points to case experience where in-house exchanges in particular supported findings – citing, for example, reliance on an in-house legal director’s materials in a national abuse probe and the Commission’s use of in-house documents in a recent dominance case. The overall inference: an expanded privilege would remove probative evidence and narrow investigators’ sight lines without any demonstrated compliance upside.

But even if it were true that national law tilted further, it would, according to the brief, not decide the issue. The Court’s interpretation in Akzo turned on independence, not on a tally of domestic rules – and the officials hold on to that, recalling the ECJ’s words: “Notwithstanding the professional regime applicable […], an in-house lawyer cannot, whatever guarantees he has in the exercise of his profession, be treated in the same way as an external lawyer, because he occupies the position of an employee which, by its very nature, does not allow him to ignore the commercial strategies pursued by his employer, and thereby affects his ability to exercise professional independence.” Put differently: comparative practice may be interesting; it is not legally determinative for any EU competition procedures.

The paper also rejects self-assessment under Regulation 1/2003 as a basis for change and finds no evidence that jurisdictions recognizing in-house LPP achieve higher compliance. In other words: Only independence from the company under investigation remains the gating criterion; workplace proximity is framed as a risk to candor, rather than something promoting it. In fact, the officials call the proximity of in-house lawyers to their employers a “double-edged sword” in terms of ensuring compliance: “While it does allow for in-depth knowledge of the business, which is certainly positive, it is precisely that proximity and close involvement in the business that may, in an employment situation characterized by the existence of a relationship of subordination, preclude a candid assessment of compliance and make firm opposition to plans of questionable compliance more difficult.”

The brief also warns that extending LPP to in-house lawyers would invite line-drawing problems: what counts as “legal advice” inside a corporation, and how to segregate it from operational involvement? The brief bluntly argues that an in-house shield would be “liable to be abused,” lengthening and complicating inspections by multiplying privilege disputes and review burdens. Assertions of enforcement-neutrality are labelled unconvincing: the expected effect is slower, heavier investigations with wider grey zones – and would outweigh any alleged compliance benefits.

What it means

As the brief does not provide any detail on any forthcoming procedural adjustments beyond this strict stance (and does not hint at any mitigating procedural reforms the Commission would consider acceptable in terms of LPP), the message for companies is immediate: do not expect any administrative recalibration toward in-house privilege any time soon. Instead, plan on continuity, building on existing constraints required by the enforcers’ approach:

• Treat in-house communications as potentially reviewable in EU competition investigations and design workflows accordingly.
• Anchor sensitive legal analysis in independent, EU-qualified external counsel when privilege is critical.
• Build clear routing rules for when to engage external counsel: in particular, high-risk self-assessments, investigation scoping, remedy roadmaps, and raid-day advice should lay in the hands of outside lawyers.
• Tighten documentation hygiene: separate legal advice from business commentary, avoid broad distribution lists, and retire any residual “copy Legal” reflex as a privilege proxy.
• Use disciplined labeling and matter management so that genuinely legal communications are clearly framed as requests for, or provision of, legal advice – while recognizing that, under the brief’s stance, in-house communications remain exposed.
• Where practical, maintain distinct factual chronologies and preserve privileged legal assessments through external counsel channels.

The brief does not hint at any new procedural accommodations by enforcers that would change these best practices.

Legal functions specifically must define their remit with precision and document touchpoints that require external escalation. They must continue to work based on playbooks that assume no in-house LPP and consider refreshers for their business teams on privilege hygiene – what constitutes legal advice, how to structure requests, and how to keep operational execution separate from legal appraisal. Where internal audits are necessary, plan documentation and escalation paths ex ante so that the most sensitive conclusions can be captured via external advice where needed.

For EU competition policy, the brief signals a continued adherence to the ECJ’s Akzo doctrine, passing up the opportunity for legislative reform more than a decade after the original ruling. This position diverges from about a fifth of EU member states and major jurisdictions like the United States and the United Kingdom, both of which recognize LPP for in-house lawyers under certain conditions that account for their embedded role within the business.

And although the brief was admittedly not intended to address this point, it is notable that it only in a footnote mentions the ECJ’s recent expansion of LPP for external counsel in cases such as Orde van Vlaamse Balies (C-694/20) and Ordre des avocats du Barreau de Luxembourg (C-432/23). These decisions affirm that companies receiving external legal advice in the EU can expect both the content and existence of their communications with external lawyers to remain confidential – even if they do not relate to the subject of a specific investigation. While exceptions to this rule are possible, they may only exist where there is a justified public interest, and only where strictly necessary(see our article on the Vlaamse case here).

While this may have been yet another reason for the officials to oppose the extension of such privilege to in-house counsel, the Commission’s silence on the implications of these judgments is likely to fuel further debate. Its reception of the case law will need to be clarified, be it as part of the Regulation 1/2003 reform process or otherwise. For as the door closes on LPP for in-house counsel, the handling of external counsel communications will become even more critical.

Authored by Florian von Schreitter.