CMA sets the tone on searching and seizing mobile phones during competition law investigations

Some useful insight on the Competition and Markets Authority’s (CMA’s) approach to searching and seizing mobile phones in a dawn raid has emerged from a recent Competition Appeal Tribunal (CAT) judgment.

The CMA applied to the CAT for search warrants relating to a suspected cartel, and the judgment signals both the CAT and the CMA’s awareness of the intrusiveness of searching and seizing (in particular, personal) mobile phones. The CMA set out the terms on which it would exercise its power to search and seize mobile phones, in an attempt to minimise the disruption to the phone holder. This is reassuring, to some extent, but also serves as an important reminder to businesses to ensure that their dawn raid policies and procedures are up to date. 

In this briefing, we summarise the CMA’s application for search warrants in this case and the undertakings that the CMA gave in relation to searching and seizing mobile phones. We also set out the steps that businesses should be taking to help manage the disruption and risk of being the subject of a competition law investigation.

CMA’s application for search warrants

The CMA applied for four warrants to enter and search business premises and take possession of documents in connection with a suspected cartel involving three waste management service providers in the UK. “Documents” is a wide concept and includes many types of written material, including text messages. The application included powers to inspect, take copies of and, if necessary, take possession of material stored electronically (eg, on business and personal mobile phones).

The CAT can issue such a warrant if it is satisfied that there are reasonable grounds for suspecting that:

• Documents which the CMA has the power to require to be produced (on the basis that the CMA considers the documents relate to an investigation into a suspected competition law infringement) are on, or accessible from, any business premises.
• If the documents were required to be produced, they would be concealed, removed, tampered with or destroyed.

Evidence presented by the CMA suggested that:

• Communication within the cartel may have been predominantly over the phone (and to a lesser extent by email), and while some documents may have been deleted or concealed, others were likely to still be accessible.
• Steps had been taken by the businesses in question to conceal the arrangement from their customers, indicating that they knew it was illegal (or at least improper), so the businesses might well attempt to conceal or destroy relevant materials if asked to produce them.

Proceeding on this basis, the CAT granted the warrants. (The CAT’s judgment is available here.) 

CMA’s undertakings for search and seizure of mobile phones

In recognition of the intrusiveness of searching, and particularly seizing, mobile phones (especially personal ones), the CMA provided undertakings to:

• Ensure that any imaging/copying of a personal mobile phone took place on the premises (in so far as reasonably practicable).
• Return any SIM card on the phone within two hours.
• Return the phone within 36 hours (unless the CMA obtained consent to hold it for longer).
• Take all reasonable steps to ensure that the phone holder was not left without access to a substitute mobile phone.

What steps should businesses be taking?

The inclusion of these undertakings in the warrants in this case is reassuring to the extent that the CMA (and the CAT) recognise the invasiveness of searching and particularly seizing someone’s mobile phone. However, many people are still likely to consider being without their phone for up to 36 hours to be unsettling (at the very least) to some degree. The undertakings also clearly anticipate that personal mobile phones may be required to be searched and imaged, if they have been used for relevant business communications.

Would your staff be prepared to hand over their phones in a dawn raid? Do you have an up- to-date policy to support the business in the event of a dawn raid?

Businesses (of all sizes and in all sectors) should ensure that they:

• Prepare for dawn raids with appropriate internal protocols and legal support.
• Train staff on the CMA’s investigative powers and on how to respond during a CMA investigation.
• Encourage the use of separate personal and professional devices, where possible.
• Review data governance and mobile usage policies.

Our team has a wealth of experience in advising on investigations by the CMA and other UK competition regulators into suspected cartel activity or abuse of dominance, and on wider market investigations. We can advise on all aspects of competition investigations, including dawn raids preparedness.