There’s something curiously Sisyphean about the debate on legal professional privilege in competition law. Like some judicial boulders perpetually rolled uphill, only to tumble back down, the arguments presented in November’s Competition Policy Brief No. 1/2025 find themselves contending with an evolving legal landscape that merits closer examination.
The policy brief presents a careful defence of established doctrine, yet the legal terrain has shifted considerably since the foundational cases were decided. Reading through the authors’ arguments, I’m struck by how much they rely on formal distinctions rather than practical realities and how poorly they address the actual compliance challenges facing businesses today.
The Independence Question
The European Commission’s core argument is straightforward: Namely, employment relationships create subordination, subordination undermines independence, and there can’t be privilege without independence. It’s neat, logical, and almost entirely theoretical.
In practice, in-house counsel occupy positions of considerable authority. They regularly advise against business initiatives on legal grounds. They’re bound by the same professional codes of conduct, subject to the same disciplinary mechanisms, and face the same professional consequences for ethical violations as external lawyers.
Yes, in-house counsel receive salaries from their employers. But external lawyers face economic pressures too, pressure to keep clients happy, to avoid losing mandates, to maintain relationships that generate fees. If we’re going to talk about independence, we should acknowledge that perfect independence doesn’t exist. The question is whether in-house lawyers, particularly those admitted to national bar associations, maintain sufficient independence to provide genuine legal advice.
The five member states that recognise in-house privilege, Belgium, Ireland, Hungary, the Netherlands, and Portugal, have concluded that, with proper regulatory frameworks, in-house counsel do have sufficient independence. These jurisdictions are not radical outliers. They’re sophisticated legal systems that have carefully examined this question. Indeed, in the land of impeccable order and Alpine discretion, Switzerland has granted in-house counsel the shield of legal privilege in 2025.
In a footnote, the policy brief acknowledges the Court of Justice’s Grand Chamber judgment in Orde van Vlaamse Balies v. Vlaamse Regering (C-694/20, 8 December 2022), though it characterises the judgment as concerning “interactions between independent lawyers and their clients” with limited bearing on in-house counsel.
This characterisation may warrant reconsideration.
Orde van Vlaamse Balies marked a decisive turning point in EU law. While the case involved communications with external lawyers, the Grand Chamber unequivocally anchored legal professional privilege in Article 7 of the Charter of Fundamental Rights of the EU, which protects the right to privacy, establishing it as a safeguard for confidential legal communications rather than merely a procedural instrument of defence under Article 47. The Court of Justice’s reasoning isn’t confined to independent counsel. What matters is the confidential nature of the communication and its purpose, obtaining or proving legal advice. This reasoning, reinforced by the European Court of Human Rights’ long-standing position in Michaud v. France and its recent ruling in Denysyuk and Others v. Ukraine, sweeps away any distinction between external and in-house counsel. The confidentiality of legal advice, whether contentious or not, is inviolable. The European Commission’s lingering reluctance to recognise in-house privilege is thus unsustainable. The law now demands that communications with in-house lawyers be treated with the same inviolable respect as those with external counsel.
The Self-Assessment Problem
Self-assessment is where the European Commission’s position becomes particularly difficult to defend.
For more than two decades, European competition law has operated on a self-assessment basis. Companies must independently evaluate whether their conduct complies with articles 101 and 102 of the Treaty on the Functioning of the EU. There’s no notification system or advance clearance — companies make their judgments and live with the consequences.
This regime creates an obvious need for frank, confidential legal advice. Yet the current rules mean that a company’s internal analysis of potential competition issues, the very analysis the self-assessment system requires, can be seized and used against them in an investigation.
The European Commission’s response is essentially that Akzo Nobel Chemicals Ltd. v. Commission already considered self-assessment. But Akzo was decided in 2010, seven years after Regulation 1/2003, and the judgment doesn’t meaningfully engage with how self-assessment changes the calculus. Saying we have already thought about this isn’t the same as addressing the concern.
The practical effect is troubling. Larger companies with substantial legal budgets can route sensitive questions through external counsel and obtain privilege. Smaller businesses often can’t. This creates a two-tier system in which privilege protection correlates with financial resources rather than the legitimate need for legal advice.
The Evidence Question
The European Commission warns that extending privilege to in-house lawyers would help conceal wrongdoing. They cite recent US cases involving Google and Amazon as cautionary examples. But these examples actually demonstrate the opposite of what the European Commission claims. In both cases, courts successfully identified and rejected improper privilege assertions. The system worked. Moreover, these abuses occurred in a jurisdiction with in-house privilege, were detected, and were sanctioned. This is hardly evidence that recognising such privilege makes enforcement impossible.
More importantly, we have real-world data. Five EU member states have operated with in-house privilege for years. Where is the evidence of systematic abuse? Where are the cartels hidden behind walls of privileged in-house communications? The European Commission doesn’t cite any, because there isn’t a pattern of abuse to cite.
The arguments assume that in-house privilege would be absolute and unreviewable. But it wouldn’t be. Like all privilege claims, it would be subject to limitations. It would cover only genuine legal advice (not business strategy) and communications with properly qualified lawyers, and it would be subject to crime-fraud exceptions. Courts and regulators would retain authority to review privilege assertions.
The Efficiency Argument
The European Commission argues that recognising in-house privilege would make investigations more burdensome because in-house lawyers often play multiple roles — legal adviser, business strategist, corporate officer — and distinguishing legal advice from business guidance would be difficult.
This concern is overstated. Jurisdictions with in-house privilege have developed workable frameworks for making these distinctions. The privilege applies when the lawyer is acting in their capacity as legal counsel, providing legal advice. Yes, this requires case-by-case analysis. But so does the current system for external counsel privilege.
The argument also ignores a countervailing efficiency concern. The current system forces companies to route communications through external lawyers simply to obtain privilege protection. This adds cost, delays decision-making, and creates artificial complexity. It’s hardly obvious that this is more efficient than allowing direct privileged communication with in-house counsel.
The International Dimension
The policy brief barely acknowledges the international dimension, but it matters. Most major trading partners recognise in-house privilege. The UK did as an EU member state, and it continues to do so post-Brexit. The US, Canada, and Australia all recognise it.
This creates practical complications. A European company’s in-house legal advice is privileged in a parallel investigation in London, New York, or Toronto but not in Brussels. This complicates cross-border investigations, creates strategic disadvantages for EU businesses, and produces inconsistent treatment of identical legal advice depending on the jurisdiction.
What’s Really at Stake
At bottom, this debate is about how we think modern compliance works.
The European Commission’s framework reflects a traditional model: lawyers as court advocates, privilege as protecting the sanctity of litigation. It’s a defensible model, but it isn’t the only one, and it’s increasingly disconnected from how businesses actually manage legal risk.
Modern competition compliance requires ongoing, day-to-day legal guidance. Companies need to assess distribution agreements, evaluate pricing policies, and review information exchanges, all in real time, not after routing everything through external counsel. In-house lawyers are the front line of compliance.
Denying privilege to these communications doesn’t make enforcement more effective. It makes compliance more difficult and more expensive, particularly for smaller businesses. And it creates perverse incentives: Companies document less, speak less candidly, or incur substantial costs routing routine matters through external counsel.
A Better Approach
The European Commission frames privilege as binary: Either employment relationships preclude independence or they don’t. But there’s a middle ground.
In-house privilege could be recognised subject to clear conditions, for example,
- admission to a national bar association with meaningful regulatory oversight;
- application only to communications seeking or providing legal advice, not business strategy;
- subject to fraud exceptions; and/or
- reviewable by courts or regulators when abuse is alleged.
These conditions would address legitimate enforcement concerns while recognising the reality of modern legal practice and the needs created by the self-assessment regime.
Conclusion
The European Commission’s position rests on a formal distinction, employment versus independence, that doesn’t reflect how professional legal advice actually functions. It dismisses practical compliance concerns without adequate analysis. And it ignores the experience of multiple jurisdictions that have recognised in-house privilege without the enforcement catastrophes the European Commission predicts.
It’s worth asking whether our privilege rules still fit the system we have created. The evidence suggests they don’t and that carefully extending privilege to qualified in-house counsel would better serve both effective compliance and fair enforcement.
The European Commission may believe this debate is settled. But the questions it raises aren’t going away.
This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.
Contacts
- /en/people/m/mavroghenis-stephen-c
Stephen C. Mavroghenis
Partner