A dawn raid on a high-profile target conducted last week by the Australian Competition and Consumer Commission (ACCC) highlights this enforcer's recent aggressiveness in investigations. Use of such powerful tools to collect evidence is part of Australia's recent strategy on criminal prosecution of anticompetitive conduct and follows a number of significant trial and appellate victories and large penalties. It is notable that ACCC publicized this use of its search warrant powers, when in the past it rarely has commented on these confidential operations.
Background to this warrant
Early one morning in late July, 20 officers from the ACCC and the Australian Federal Police arrived at the premises. Armed with a warrant, the ACCC officers searched the offices, computers and servers for digital and paper evidence, continuing their work until well into the night.
The dawn raid was prompted by evidence that surfaced last year in a public inquiry (a "Royal Commission"), during which one witness raised accusations of anticompetitive collusion including agreement on a "minimum price for jobs." This evidence prompted ACCC's investigation into possible price fixing.
Issues for businesses in Australia
This recent example is a timely reminder that the ACCC will act on information whatever its source. Press statements by CEOs, information from whistleblowers, and evidence from foreign enforcers all have sparked ACCC investigations and later successful prosecutions. Businesses should be aware that any communication may fuel an investigation and innocent communications require careful consideration.
The July raid is distinctive for its publicity. In an unusual move, an ACCC spokeswoman confirmed to reporters that the raid was occurring. Ordinarily dawn raids are conducted in secret: the ACCC is not obliged to disclose a dawn raid, and it is clearly in the interest of target companies not to publicize a dawn raid. The publicity of this raid is further evidence of a more assured, hardline approach by the ACCC.
In recent years the ACCC has increased its use of tools to gather evidence to support antitrust prosecutions, including search warrant investigations. This suggests the ACCC is focused on ensuring all relevant evidence is collected and minimizing opportunities for destruction of evidence. The ACCC of course may request evidence on a voluntary basis or using other statutory powers; such avenues are often time consuming. This dawn raid suggests that the ACCC was confident in its case theory and is focused on rapid progress of the matter. Businesses should be aware that now it is less likely that the first sign of an investigation will be a gentle "please explain" letter, more likely an army of investigators arriving to spend the night.
The government's use of these powers is stressful and demanding of businesses, which are well advised to have processes and procedures in place to minimize disruption in the event the ACCC comes knocking. We have published a set of best practices guidelines for adequately preparing for and dealing with an ACCC dawn raid, which can help companies mitigate their competition law risk in the event of a dawn raid.