On 2 March 2023, the Competition and Consumer Protection Commission (the "CCPC") issued a statement setting out principles and practical steps regarding the treatment of material that is seized during the course of an unannounced on-site inspection – also known as a 'dawn raid' – and is the subject of privacy or legal professional privilege ("LPP") claims (the "Statement").
The headline points are as follows:
- The Statement appears to be a further measure by the CCPC to safeguard the legal rights of undertakings and individuals that are subject to an investigation, responding to the Irish Supreme Court's CRH judgment in 2017.
- While the Statement is somewhat generalised in nature and discrete practical issues will arise and need to be resolved on a case-by-case basis, the Statement contains a helpful overview of the principles and steps that are followed in the context of CCPC inspections into potential competition and consumer protection breaches, more specifically the protections against the exercise of the CCPC's broad inspections powers in order to safeguard privacy and LPP claims.
- The Statement is particularly relevant in view of the new Irish civil enforcement regime under the Competition (Amendment) Act 2022 that will soon be commenced, with the possibility of new investigations including new unannounced 'dawn raid' inspections in the near-term.
Background
In CRH Plc, Irish Cement Ltd v The Competition and Consumer Protection Commission [2017] IESC, the Irish Supreme Court found that the CCPC was not entitled to review emails of a senior executive containing private information that had been seized during its the Bagged Cement investigation in 2014 and that were outside the scope of the inspection – which was a significant and far-reaching intervention in order to uphold the plaintiff's privacy rights. The Supreme Court itself suggested the introduction of a code of practice, perhaps involving individual protocols, to deal with privacy claims in the context of future inspections. In 2020, on closure of the Bagged Cement investigation, the CCPC published a 'Privacy Protocol' which outlined how privacy claims would be dealt with in future investigations.
Within this context, the Statement appears to be a further measure implemented by the CCPC to respond to the CRH judgment, seemingly replacing the 'Privacy Protocol' previously published by the CCPC which is no longer available on the CCPC's website.
CCPC's Search Powers
The CCPC is empowered to investigate breaches of competition and consumer protection law as part of its law enforcement remit. To this end, the CCPC has broad powers to search business premises and privates homes connected with undertakings or individuals subject to the investigation (the "Search Target") under section 36 and section 37 of the Competition and Consumer Protection Act 2014 (the "2014 Act"), including powers of entry, search, seizure and retention. Searches are carried out by the CCPC to gather evidence to support investigations of potential breaches of competition or consumer protection law. Searches must be carried out pursuant to District Court search warrants.
The Statement sets out the principles which will be followed when carrying out searches and when dealing with material seized and how claims of privacy rights or LPP will be dealt with.
CCPC Inspection Principles
The Statement states that "the CCPC ensures that effective and adequate steps are taken to identify, in a manner proportionate and necessary to the nature of the particular investigation, material which may be relevant or potentially relevant to the investigation". Further, the CCPC will ensure that any search operation is "as focused as practicable". However, the Statement acknowledges that extraneous material may be gathered and retained during searches that is not relevant to the investigation.
As a general matter, the Statement provides that the following principles are applied by the CCPC in order to protect the rights of the Search Target during an investigation (the "Principles"):
- Legality – whereby search operations are conducted lawfully and fairly, consistent with the legal rights of those under investigations;
- Proportionality – whereby search operations are conducted in a proportionate manner having regard to both the CCPC's duty to seek out, obtain and preserve evidence and the legal rights of those under investigation;
- Necessity – whereby the CCPC is to take steps to ensure the scope of the investigation is as focused as possible in light of the particular circumstances of the matter, bearing in mind that extraneous material may nevertheless be seized and retained.
- Fairness – whereby the CCPC recognises the right to fair procedures of those under investigation, while also recognising the CCPC's legitimate interest in investigating potential competition and consumer protection law breaches; and
- Transparency – whereby the CCPC documents its procedures and demonstrates due regard for the rights of the Search Target where it is appropriate to do so (although it may be prevented from releasing information in relation to investigations in certain cases).
The Principles are a welcome confirmation of the considerations that the CCPC takes into account in preparing for inspections to safeguard legal rights. While (unsurprisingly) the Principles do not provide for a procedure for claims relating to the relevance of certain seized materials (which may nonetheless be raised by parties and their legal advisors during the course of inspections), certain of the Principles (for example, proportionality and necessity) helpfully clarify how inspections will be conducted in a manner that ensures the potential relevance of any seized materials to the matter under investigation.
Practical CCPC steps to safeguards rights
Consistent with the Principles, the Statement set outs the practical steps that will be followed during the inspection to safeguard the rights of those under investigation. While these are not new, they are significant in confirming how the CCPC will conduct itself at the start and end of an inspection.
The Statement acknowledges that where the CCPC's authorised officer arrives at the Search Target's premises with a warrant, the Search Target is entitled to review the warrant and to contact its legal representatives. However, the search operation may commence regardless of whether the legal representatives are present.
The CCPC's authorised officer will present various materials to the Search Target, namely a photocopy of the warrant; an explanatory note describing the CCPC's powers, the purpose of the search and the type of materials being sought; and a copy of the Statement. However, the CCPC has discretion to decide to withhold these materials, for example if there is a risk of interference with potential evidence.
After the search concludes, the CCPC's authorised officer will provide to the Search Target a list of all items the CCPC seized, referred to as the 'Site Exhibits Chart'.
Dealing with privacy and LPP claims over seized material
The Statement specifically deals with two categories of claims by the Search Target over the material seized, namely claims in respect of privacy rights and claims relating to LPP. While the principles outlined in the Statement are high-level and certain practical issues will likely arise on a case-by-case basis (for example, the type of 'in scope' communications subject to privacy and LPP), the principles are generally consistent with international best practice in allowing privacy and LPP claims to be raised and the process for dealing with and resolving such claims.
- Privacy claims
While the concept of privacy or personal information is not explicitly defined in the Statement, the Search Target may make claims as to its privacy rights during the course of the inspection (or indeed after the inspection if further materials are identified).
In order for a Search Target to make a privacy claim over seized material, the Search Target must clearly identify the material over which privacy is being claimed and give specific reasons to the CCPC as to why the material gives rise to privacy rights (with blanket privacy claims being rejected).
The CCPC will decide on the claims raised on case by case basis, in accordance with the Principles listed above. The CCPC's authorised officer may decide to deal with privacy claims raised during the search operation, either onsite during the course of the search or after the search is over, indicating the method for reviewing claims by the Search Target.
- LPP
As a general matter, LPP is the confidentiality protection of communications between lawyers and clients which concern the seeking, giving and receiving of legal advice (see our recent briefing here). LLP protects such communications from production to third parties, such as the CCPC's authorised officer during the course of an inspection (or indeed after the inspection if further materials are identified).
The Statement acknowledges that section 33 of the 2014 Act addresses claims of LPP over seized material. During a search, a Search Target may claim LPP over material. If there is a dispute as to whether material should benefit from LPP, the CCPC's authorised officer can place the material in a sealed envelope (or stored separately if electronic material), until a decision as to LPP status is made.
After a search, a Search Target may still claim LPP over seized material. In addition, where the CCPC finds that information is potentially subject to LPP, the CCPC will preserve the material's confidentiality until decision as to its LPP status is made.
Key takeaways
The Statement is an important confirmation of the CCPC's practices and policy in conducting on-site inspections or 'dawn raids'. It is particularly relevant in view of the possibility of new CCPC inspections the new Irish competition regime that will be soon be commenced.