Coping with Competition Authority Dawn-Raids

The Irish Competition Authority regularly dawn-raids businesses, professional bodies and trade associations. Everyone in business in Ireland needs to be briefed on how to deal with such unannounced visits. A&L Goodbody’s EU and Competition Law unit, the largest such unit in Ireland, briefs you on what you need to know...

You are sitting at your desk. The phone rings. Your receptionist says that six people from the Competition Authority are in reception armed with a District Court warrant. Before you hang up, one of the investigators is in your office searching through your files, reading your diary, checking your computer, scanning your e-mails and asking you various questions about what you did two years ago. Fact or fiction? Businesses, professional bodies and trade associations in various economic sectors and throughout Ireland would testify that these dawn-raids are now commonplace.

The Competition Authority is the independent agency charged with regulating certain unfair business practices in Ireland. They have wide powers of investigation. Breaches of Irish competition law expose:

• managers to fines of up to IR£3 million and/or imprisonment for up to two years
• and;
• business to fines of up to IR£3 million and/or ten per cent of turnover.

These penalties are imposed by the courts for breaches of the Competition Acts, 1991-1996. The dawn-raids are conducted by authorised officers of the Authority.

The Authority conducts dawn-raids to gather information or evidence about alleged breaches of competition law. Such breaches may be either anti-competitive arrangements or abuses of dominance. You may be dawn-raided because it is suspected that you have evidence of a breach of competition law whether by yourself or by others. The search is to find evidence. Dawn-raids are the result of either own-initiative investigations by the Authority or following complaints from third parties.

The Authority may search any premises used in connection with a business. Most dawn-raids are on offices but dawn-raids could be conducted on "home offices" or "studies". Vehicles or business premises named in the warrant may be searched.

The Authority may visit at any time but do not visit at dawn! Visits can last for several hours. Your day’s business may be entirely disrupted as the Authority’s officials roam around your offices and ask you questions.

The Authority arrive unannounced. They present a copy of the District Court warrant which authorises the Authority to conduct the dawn-raid. One group reads through files, diaries and other documents. Another group photocopies documents. A third group makes copies of computer files. The Authority will normally question everyone who enters or leaves the building. After reviewing the information, the Authority will probably ask some executives in the building about matters under investigation. The Authority will give you an inventory of the documents which have been copied and, you will be asked to sign it and you should sign it only if you have thoroughly checked it.

• One person in your organisation should take charge of the situation. This person should act as co-ordinator of the investigation. Ideally, your organisation should have a member of the management briefed in advance on how to deal with such raids.
• Check the warrant presented by the Authority. Does it correctly name the business? Does it relate to the correct address? Are all of the investigators who have arrived named in the warrant?
• Call your competition lawyers who will endeavour to travel immediately to your offices.
• Ask the Authority what is the purpose of their visit.
• Have a member of your management team accompany each Authority official at all times.
• The Authority will photocopy all relevant documents. The Authority should not copy correspondence with lawyers. Make a second copy of each document which is being copied by the Authority. The Authority may not remove originals. Read the copies which are being made by the Authority as they are being made. This is particularly important for anyone who may be asked questions by the Authority at the end of the dawn-raid.
• The Authority may decide to copy computer files. They may only copy files relating to the business named in the search warrant. Ensure that a copy is made of whatever computer records are copied by the Authority.
• If the Authority questions you, then answers must be truthful and accurate because it is an offence to mislead the Authority. However, if you do not know the answer to the question then say so as you are not expected to know everything. Seek legal advice before answering questions which might incriminate you.
• Keep detailed contemporaneous notes on the investigation. Have a tape recorder available for any interviews.
• Do not issue a press release or publicly comment on the dawn-raid unless it becomes public knowledge. Advise your staff that confidentiality is imperative in this situation.
• Co-operate fully with the Authority and do not obstruct or impede the investigation. It is important to remember that while the investigation may seem unreasonable, the Authority has been conferred with extensive powers of search and interrogation by the Irish Parliament.

At the end of the day, thank your staff for all their work during the dawn-raid - it would be a difficult day for them - and for you!

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.