knowledge 7 April 2016 |

Pro-privacy Judgment of Irish Competition Court Limits Regulator’s Dawn Raid Powers Regarding Electronic Data

In a ruling likely to have far-reaching implications for the CCPC (and other Irish regulatory law enforcement agencies), particularly as regards seizure of electronic data, the Competition division of the High Court ruled this week that the CCPC’s bulk copying of electronic files on a dawn raid in May last year was unlawful.¹

Finding that current CCPC electronic seizures practices “perhaps inevitably, result in some materials being taken away that are not covered by the applicable warrant,” the Competition Court held that “to go through all the material” seized would contravene privacy rights under the European Convention of Human Rights and the Irish Constitution (the detailed 71-page judgment also considers potential application of the EU Charter of Fundamental Rights and Irish data protection rules).

The ruling will mean that appointment of an independent third party to assess the relevance of material seized (particularly electronic data) by the CCPC during a search is likely to be become a feature of Irish competition law enforcement actions.

On 14 May 2015 authorised officers of the CCPC, along with members of An Garda Síochána, conducted a surprise search of business premises of a party under investigation for alleged anti-competitive practices in the bagged cement sector. In the course of the search, CCPC IT officials requested access to emails and other electronic data for certain employees. The data requested was stored on an off-site storage facility in the UK and operated by a third-party.

The request was acceded to by the party under investigation. Forensic copies of the electronic material were made and removed by the CCPC. In particular, the CCPC seized the entire mailbox of a former senior executive. That executive had subsequently taken up a senior role in another entity within the group to which the party under investigation belongs. In addition to relevant information, the copied mailbox included documents relating to other companies within the group of the party under investigation as well as personal emails.

At trial, the plaintiffs’ lawyers contended that this information was outside the scope of the CCPC’s search warrant. Accordingly, the plaintiffs argued that the CCPC had unlawfully removed the information and, consistent with that position, that CCPC officials had no right to review the contested material to determine relevance. The CCPC, on the other hand, contended that such a position would seriously impede its ability to conduct effective search and seizure operations and that, as a regulatory agency, it must have the ability to determine what is relevant to its investigation.

Granting an injunction in favour of the plaintiffs, the Competition Court held that the CCPC could not access or review the unlawfully obtained information pending agreement between the parties as to the manner in which such material should be assessed for relevance. In this regard, the Court suggested that the parties should consider adopting a similar approach to the “perfectly sensible and practically operable process” set out in statute where disputes arise as to whether documents seized during a CCPC search are legally privileged. This system provides, in the event of dispute on legal privilege, for court mandated appointment of an independent third party to review and assist in determining whether information is legally privileged or not.

The Competition Court judgment states that it is “perhaps inevitable” that materials outside the scope of a search warrant will be seized in any electronic seizure operation by the CCPC. This means parties presented with a warrant and request by the CCPC to search servers including material unrelated to the matter under investigation should endeavour to reach agreement with the CCPC in relation to the assessment of the relevance of such data by an independent third party.

In all events, the appointment of independent third-party assessors to review the relevance of electronic data seized during searches looks set to become a routine part of Irish competition law enforcement actions.