The European Commission recently announced that it is opening an investigation into Insurance Ireland. This serves as a timely reminder of the importance of businesses and associations of undertakings investing time and resources in competition law compliance and dawn raid readiness. We suggest some simple steps that can be taken to prepare for a dawn raid and highlight the potential challenges of preparing for unannounced inspections in the context of a patchwork regulatory regime.
Association of Undertakings’ data pooling system prompts investigation
Following inspections carried out in July 2017 in the Irish motor insurance market, the European Commission announced on 14 May 2019 that it has opened a formal antitrust investigation into representative body, Insurance Ireland. The European Commission’s investigation of Insurance Ireland concerns the conditions of access to Insurance Ireland’s data pooling system – Insurance Link. As recognised by the European Commission, data pooling arrangements are often pro-competitive. However, the European Commission’s concern is that the conditions imposed on companies wishing to participate in and access the Insurance Link database may have had the effect of placing these companies at a competitive disadvantage on the Irish motor insurance market in comparison to companies already having access to the database.
The European Commission’s investigation highlights the competition law risks faced by associations of undertakings, and their members. Indeed, representative bodies, such as Restaurants Association of Ireland and Nursing Homes Ireland, have also been the subject of recent investigations by the Irish Competition and Consumer Protection Commission (CCPC). In addition to being cognisant of and ensuring compliance with their competition law obligations, businesses and associations in Ireland need to be prepared for the possibility of unannounced inspections by the European Commission or the CCPC.
Tools for responding appropriately to a dawn raid
In fact, the potential reputational risks and the risks of non-compliance with statutory obligations during a dawn raid mean it is imperative for businesses and associations of undertakings to ensure they are prepared for and respond appropriately to an unannounced inspection. A range of steps can be taken to prepare for unannounced inspections, from training staff to adopting and implementing dawn raid policies and procedures.
Our Dawn Raid Infographic helpfully outlines the steps that can be taken in the event of a dawn raid by the CCPC or the European Commission. This may be used as a tool to prepare for a dawn raid and also as a first port of call in such an event.
Ensuring dawn raid readiness is complicated by the threat of unannounced inspections from a number of different regulators with varying search and inspection powers. Unannounced inspections in Ireland may be carried out not just by the CCPC and the European Commission but also by the Revenue Commissioners, the Commission for Communications Regulation, the Central Bank of Ireland, among many other regulators, depending on the nature of the conduct under investigation. While there are certain commonalities between the dawn raid powers of some regulators, it is important to prepare for and respond appropriately to an unannounced inspection having regard to the relevant regulator’s powers. We offer legal advice specifically tailored to our clients’ needs, whether in preparation for, or in the wake of, any unannounced inspection.
A lack of dawn raid preparedness can cause significant harm to any business or association of undertakings, regardless of whether employees have knowingly engaged in anti-competitive behaviour or not. Although the myriad of regulators with inspection powers makes it difficult to prepare for every eventuality, simple steps can be taken to minimise the risks associated with unannounced inspections. As a starting point, businesses and associations can use our Dawn Raid Infographic to prepare for a dawn raid by the CCPC or the European Commission, and as a first port of call in responding to such a raid.