A Cautionary Tale: UK CMA Given Green Light To Raid Home Of Potentially Dishonest Director

The UK Competition and Markets Authority (CMA) has been granted a warrant to search the home of a managing director who denied using his personal phone for work purposes during a dawn raid at his company's premises.

Domestic dawn raids are an increasing feature of antitrust enforcement as working patterns have become more flexible. Reports suggest that the CMA has conducted at least ten home dawn raids since 2017.

However, the CMA needs a warrant from the Competition Appeal Tribunal (CAT) to search a private home. The CAT has discretion, even where the legal test for a warrant is met, to balance an individual's right to privacy and family life against the public interest.

In this case, the CAT's judgment is a helpful example of how it will balance those factors against each other. It also provides a cautionary tale to illustrate the consequences of making dishonest statements to a regulator in a dawn raid.

CMA request to search the MD's home

The CMA raided the business premises of the MD's company in December 2024, as part of its investigation into suspected bid rigging of tenders for the supply of roofing and construction services in the education sector.

During that raid, the MD denied using his personal phone for work purposes and only provided other devices to the CMA to search. However, the CMA later identified evidence that the MD's phone number was used in anticompetitive information exchanges.

The CMA applied to the CAT and argued that the legal test for a warrant was met. This test requires reasonable grounds for suspecting that:

1. there are documents on, or accessible from, domestic premises that the CMA has the power to require to be produced
2. if the CMA did require those documents to be produced, they would instead be concealed, removed, tampered with, or destroyed.

CAT's decision that a home raid was legal and that public interest concerns outweighed the MD's right to privacy and family life

The CAT concluded that the legal test for a warrant was met.

There were reasonable grounds to suspect that the MD's personal phone, or other mobile devices he had previously used, would be in his home and could contain information relevant to the CMA's continuing investigation, even if he might have attempted to delete them.

There were also reasonable grounds to suspect that the MD would not produce these documents if required by the CMA. The CAT concluded this for reasons that are partly redacted, but which included that the MD:

• had directly and personally been involved in the anticompetitive arrangements that the CMA was investigating
• given the seriousness of the conduct, would be personally at risk of an application to disqualify him as a director, or of criminal prosecution
• appeared to have been dishonest, and to have attempted to conceal his conduct, in stating that he did not use his personal phone for work.

The CAT considered whether it should, nonetheless, use its discretion not to grant the warrant in view of the MD's right to respect for private and family life under Article 8 of the European Convention of Human Rights. It noted that the MD was likely to be living with his family and that, given the intrusive nature of a home raid, this requires a higher degree of scrutiny.

However, the MD's rights must be balanced against the strong public interest in uncovering wrongdoing. The CAT held that:

• public interest has particular "resonance" in an investigation of tenders involving public money
• the MD had "brought [the application for a warrant...] on himself by telling the CMA that he did not use his personal phone for work whereas it subsequently emerged that this was precisely the phone-number that was used for anti-competitive exchanges"
• the CMA had outlined the "sensitive way" in which it would initially seek to enter the MD's home, and the CAT also required amendments to the warrant to minimise the likelihood of school-age children being present at the raid.

Taking these factors into account, the CAT found that the balance weighed "clearly in favour" of permitting the home raid.

Key takeaways

1. While the CMA is willing to conduct home raids, this may not always be its preference. The CMA had, in the first instance, sought to conduct a raid only of the business premises. This is particularly notable when the CMA had received a favourable judgment from the High Court in an earlier case, where the High Court found that the CAT had set too high a bar to issue a warrant for a domestic raid.
2. The CAT will carefully test whether the intrusion of a domestic dawn raid is justified before it issues a warrant.
3. Dishonesty during a dawn raid can have severe consequences. According to the judgment, the MD had made a clear statement in the initial raid of business premises that his personal phone was "not used for work". The CMA, as is typical in a cartel investigation, was gathering evidence from multiple sources including those who the MD had been messaging from his phone. The authority was therefore still able to gather (at least some of) the MD's messages exchanging information with competitors. Ultimately, as a result of his denial, the CMA conducted a far more intrusive raid into his family home.

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.