The Competition and Markets Authority and the European Commission have the power to make unannounced inspections (known as a ‘dawn raid’, although in practice they rarely take place at dawn) of businesses they reasonably suspect have been involved in an infringement of competition law. During an inspection, the investigating Competition Authority is able to inspect, copy and/or remove documents and electronic records. They can also conduct interviews with members of staff (and even ex-staff) and may even carry out a search of directors’ residences.
The consequences of breaching competition law can be very severe; the competition authorities can impose a fine of up to 10% of group world-wide turnover, directors guilty of the cartel offence under the Enterprise Act could receive a prison sentence of up to 5 years and/or an unlimited fine and disqualification as a director, plus reputational damage and potential claims for damages by other businesses.
There are also fines and criminal penalties for failure to comply with an inspection.
Michelmores now has a cross-departmental rapid-response team of specialist lawyers, who can attend premises in the event of an unannounced inspection. We can advise you on legal privilege and protection against self-incrimination as well as assisting you to manage the inspection efficiently and, more importantly, in a compliant manner. We can also provide you with dawn raids training, a dawn raids strategy and/or a competition compliance plan for your business.
This article provides an overview only and is not intended to be an exhaustive analysis of complete issues. It should not be relied upon in relation to specific matters.
