A dawn raid on a high-profile target conducted last week by the
Australian Competition and Consumer Commission (ACCC) highlights
this enforcer's recent aggressiveness in investigations. Use of
such powerful tools to collect evidence is part of Australia's
recent strategy on criminal prosecution of anticompetitive
conduct and follows a number of significant trial and appellate victories and
large penalties. It is notable that ACCC publicized this use of
its search warrant powers, when in the past it rarely has commented
on these confidential operations.
Background to this warrant
Early one morning in late July, 20 officers from the ACCC and
the Australian Federal Police arrived at the premises. Armed with a
warrant, the ACCC officers searched the offices, computers and
servers for digital and paper evidence, continuing their work until
well into the night.
The dawn raid was prompted by evidence that surfaced last year in a
public inquiry (a "Royal Commission"), during which one
witness raised accusations of anticompetitive collusion including
agreement on a "minimum price for jobs." This evidence
prompted ACCC's investigation into possible price fixing.
Issues for businesses in Australia
This recent example is a timely reminder that the ACCC will act
on information whatever its source. Press statements by CEOs,
information from whistleblowers, and evidence from foreign
enforcers all have sparked ACCC investigations and later successful
prosecutions. Businesses should be aware that any communication may
fuel an investigation and innocent communications require careful
The July raid is distinctive for its publicity. In an unusual move,
an ACCC spokeswoman confirmed to reporters that the raid was
occurring. Ordinarily dawn raids are conducted in secret: the ACCC
is not obliged to disclose a dawn raid, and it is clearly in the
interest of target companies not to publicize a dawn raid. The
publicity of this raid is further evidence of a more assured,
hardline approach by the ACCC.
In recent years the ACCC has increased its use of tools to gather
evidence to support antitrust prosecutions, including search
warrant investigations. This suggests the ACCC is focused on
ensuring all relevant evidence is collected and minimizing
opportunities for destruction of evidence. The ACCC of course may
request evidence on a voluntary basis or using other statutory
powers; such avenues are often time consuming. This dawn raid
suggests that the ACCC was confident in its case theory and is
focused on rapid progress of the matter. Businesses should be aware
that now it is less likely that the first sign of an investigation
will be a gentle "please explain" letter, more likely an
army of investigators arriving to spend the night.
The government's use of these powers is stressful and demanding
of businesses, which are well advised to have processes and
procedures in place to minimize disruption in the event the ACCC
comes knocking. We have published a set of best practices guidelines for adequately preparing for and
dealing with an ACCC dawn raid, which can help companies mitigate
their competition law risk in the event of a dawn raid.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This is the first charge against a corporation under the criminal cartel provisions of the Competition and Consumer Act.
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