CILC | U.S. Company Cannot Rely on U.S. Attorney-Client Privilege Rules in the EU

For EU antitrust investigations, a U.S. company cannot rely on U.S. attorney-client privilege to prevent the Commission from demanding U.S.-located documents, particularly communications with in-house counsel. The context is an EU antitrust investigation into Broadcom/VMware’s licensing practices (VMware virtualization-software licensing practices following Broadcom’s 2023 acquisition of VMware, including moving customers from perpetual licenses to subscriptions, bundling VMware products, significant price increase, contractual terms that could increase customer lock-in, restrict interoperability, or make it harder for customers to switch).

What happened

The Commission’s information request asked Broadcom to provide all documents responsive to the Commission’s search criteria unless they are protected by EU legal professional privilege. Broadcom argued this was too broad because some documents were protected by U.S. legal privilege, including communications with U.S. outside counsel and U.S. in-house counsel.

The Ruling

The EU General Court rejected Broadcom’s request to suspend a European Commission information demand because it failed to establish a prima facie case that the Commission’s demand was unlawful.  The Commission’s demand concerned communications involving non-EU in-house counsel advising on third-country law. Broadcom argued that compelling production of documents located in the United States was an extraterritorial exercise of enforcement power. The stakes are structural:  how far the European Commission’s antitrust investigative powers extend when evidence is outside the EU and would be privileged under U.S. law. The conclusion is that third-country law doesn’t alter the EU analysis even when the lawyer and the document are both outside the EU. The order focused on Broadcom’s attempt to withhold documents from the Commission, not on whether these licensing practices actually violate EU antitrust law.

The EU law on Privilege

Legal professional privilege in the EU protects a written communication with an attorney only if three conditions are met: purpose, independence, and admission to practice in a Member State. The three conditions are applied strictly. Privilege is an autonomous EU concept and EU law determines whether a document is protected in Commission proceedings, not whether it would be privileged under U.S. law. Allowing third-country law to define the scope of protection would undermine the uniform application of EU law.

The Transatlantic Angle: Why American Businesses Should Care

These conditions produce four consequences that U.S. general counsel routinely find counterintuitive:

1) Communications with in-house counsel are not privileged in Commission proceedings, whatever the lawyer’s nationality, bar admission or seniority.

2) Communications with U.S. outside counsel are not privileged as a matter of EU law.

3) The location of the document, and the privilege law of the place where it was created, are irrelevant.

For a U.S. company, that translates into a working protocol:

1) Map the decisions that generate legal analysis with an EU dimension — pricing and rebates, exclusivity and distribution, licensing and bundling, interoperability, platform terms, data practices, M&A, foreign-investment and subsidy questions.

2) Route substantive legal advice on those decisions through independent EU-admitted counsel. In-house counsel frames the question, transmits the answer and manages the relationship; the analysis itself comes from outside.

3) Structure the internal record. Requests for advice drafted for that purpose; internal notes that faithfully report external advice without added in-house commentary; in-house analysis kept in separate documents. Privilege labels are useful for later identification but create no protection on their own.

4) Train business teams. Copying the legal department on an email does not make it privileged in Europe.

5) Have a dawn-raid and information-request protocol in place with EU counsel — including the document-by-document privilege claim and the sealed-envelope procedure the General Court set out in Akzo.

6) Treat U.S.-privileged material with the waiver risk in section 5 in mind before any production.

7) Apply the same discipline under the DMA, DSA, FSR, EUMR and national FDI screening regimes, not only in Article 101/102 matters.