Key steps in Dealing with "Dawn-Raids" by Irish and EU Competition Regulators and/or Central Bank

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Key steps in Dealing with On 4 July 2017, a number of companies acting in the Irish motor insurance sector were subject to "dawn raids" by the European Commission (“EC”), accompanied by agents from the Competition and Consumer Protection Commission (the “CCPC”).

The EC carried out the raids pursuant to its powers of investigation under Regulation 1/2003, which governs the enforcement of EU anti-trust rules. These rules prohibit, inter alia, cartels and restrictive business practices (such as price-fixing) and/or abuse of a dominant market position. A statement from the EC indicated that it has concerns that the companies involved may have engaged in anti-competitive practices.

The main industry body, Insurance Ireland, was also visited by the officials as part of its investigation.

The motor insurance sector in Ireland remains the subject of an ongoing investigation by the CCPC. This investigation regarding the signalling of future increases in private motor insurance premiums by industry participants opened in 2016. Press reports have noted increases in premiums of between 50% and 70% over the last three years. This probe is entirely separate to the EC's enquiries.

Handling Dawn Raids and Regulatory Inspections

The recent raids in the insurance sector are a reminder for companies to review their dawn raid/ regulatory inspections response plans and to train key staff on how to react. If you are a regulated entity you are likely to receive an inspection at some stage.  Scheduled, and even routine, inspections can quickly develop into an investigation, even if it was not commenced on suspicion of wrongdoing, so it is important to be prepared.

What to do in the event of:

Scheduled visits:

  • Check authorisation and identification of the relevant officials
  • Follow protocol
  • Be polite
  • Open the meeting with the right people including senior management and a note-taker
  • Co-operate but be firm and push back as appropriate
  • Do not obstruct

Unscheduled visits/ "Dawn Raids":

  • Greet the investigators
  • Obtain information from investigators on their arrival/check warrant and identification
  • Call relevant lawyers (external and internal counsel)
  • Call the office’s IT contacts
  • Arrange to shadow the investigators
  • Take copious notes
  • Decide on Public Relations Strategy
  • Report back to lawyers and shadowing team
  • Brief the business
  • Debrief at the end of the day
  • Agree next steps with the lawyers including a review of the material seized.

Recent Supreme Court Decision

As a final point to note, a recent decision of the Supreme Court in CRH PLC, Irish Cement Ltd and Lynch v CCPC (May 2017) placed restrictions on the powers of the CCPC to seize and retain electronic records and emails and stressed the need to engage with parties that are the subject of a dawn raid in a manner which respects their right to privacy under Article 8 of the European Convention on Human Rights. The CCPC has stated that it is considering the judgment carefully and assessing the implications for its search powers.

Contributed by Cormac Little and Lisa Shannon of William Fry.