Are you prepared for when the inspector calls?
By Diarmaid Gavin
7 July, 2017
Earlier this week a number of motor insurance providers in Ireland were the subject of targeted “dawn raids” in relation to an anti-cartel investigation. The raids were initiated by agents from the European Competition Directorate (“DGCOMP”) assisted by officers from the Irish Competition and Consumer Protection Commission (“CCPC”). The raids were carried out under Articles 101 and 102 of the Treaty on the Functioning of the European Union, which prohibits anti-competitive arrangements and practices between businesses (such as price fixing), as well as the abuse of a dominant market position.
Dawn Raid Powers
Notwithstanding a recent decision of the Supreme Court in CRH PLC, Irish Cement Ltd and Lynch v CCPC (January 2017), which placed restrictions on the power of the CCPC to seize and retain electronic records and emails, the raids show that DGCOMP and CCPC still retain significant powers to carry out unannounced searches where there is a genuine concern of anti-competitive conduct. The CCPC has confirmed that for one month alone in 2016, it had conducted 20 dawn raids. Investigations span a variety of industry sectors ranging from public procurement contracts in the transport sector, to investigations into anti-competitive practices in the manufacturing industry.
The investigative powers of the CCPC and DGCOMP include:
- the ability to search a business premises on foot of a legal authorisation without prior notice given to the owner;
- the capability to inspect any premises in connection with a business, including homes and vehicles of senior directors or regular employees;
- the use of force to gain entry;
- the ability to seize and copy any relevant documents to the search, including originals;
- examination and seizure of computers and laptops, making copies of computer files and hard drives; and
- the ability to interview staff in relation to the investigation and documents of interest.
Moreover, it is not only the CCPC and DGCOMP who have the authority to conduct a dawn raid. Other regulatory bodies including Revenue, the Office of the Data Protection Commissioner and the Office of the Director of Corporate Enforcement (among others), possess similar investigative powers.
Time to take action
The raids serve as a timely reminder for companies to review existing dawn raid response plans, or in the absence of such, to consider putting procedures in place and training key staff on how to react to an unannounced regulatory investigation. Dawn raids are extremely disruptive to a business leading to loss of productivity, negative publicity and, if not managed correctly, adverse legal consequences. A well-crafted and holistic dawn raid response plan that is reviewed and tested regularly will help minimise that disruption and could assist in a company’s defence.
As the largest firm outside of Dublin and with offices in Galway and Cork, Ronan Daly Jermyn are uniquely placed to provide a rapid and comprehensive dawn raid response service to companies in those regions.