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The High Court recently confirmed the Competition and Markets Authority’s (“CMA”) power to obtain warrants to carry out ‘dawn raids’ at people’s homes, even homes where other people also occupy the premises, and that there is no particularly high evidential burden on the CMA compared with a dawn raid at other business premises.
The CMA is the lead enforcer for investigating and punishing anti-competitive conduct, including cartels. It can impose fines of up to 10% of turnover and disqualify directors for competition law infringements. In addition, it also investigates and prosecutes, alongside the Serious Fraud Office, individuals in relation to the criminal Cartel Offence.
The CMA may apply for a warrant to search premises where there are reasonable grounds for suspecting that documents relevant to its investigation are present and if the documents were simply required to be produced they would not be produced but would be concealed, removed, tampered with or destroyed.
Note that in these circumstances document includes information recorded “in any form”. This means that electronic information, stored on a laptop or even a phone, is covered, as well as more traditional paper documents.
In relation to business premises, the CMA’s general position is that because cartels are by their very nature secret there is a strong motive for participants to conceal evidence so, justifying a warrant, an inference will normally be drawn that documents would be concealed, removed, tampered with or destroyed if simply required to be produced.
A previous judgment of the Competition Appeal Tribunal had suggested that the test for obtaining a warrant to carry out a ‘dawn raid’ was more rigorous for homes than for business premises and that additional evidence suggesting a propensity to destroy needed to be present for domestic premises. However, the High Court has now confirmed that this is not the case and that the simple fact that investigation relates to a secret cartel will generally be a sufficient basis for a warrant for domestic premises as well as business premises.
This judgment reinforces the CMA’s broad powers of investigation, including in relation to remote working. Businesses and individuals should not only ensure that they are fully compliant with competition law but also know what to do if the CMA appears at their door. We regularly provide competition law compliance and ‘dawn raid’ training to clients to ensure that their processes are all up to date which can be of real assistance in the event of a CMA investigation (and investigations by other regulators with equivalent powers).
If you would like to pick up on any of the points raised in this article please do contact Noel Beale or your usual Michelmores contact.
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