Dawn raids on the horizon: what businesses need to know
With impeccable preparation, a dawn raid by a competition authority is stressful for all involved. Operations are disrupted, reputational damage can be immediate, and a raid marks the beginning of a process that can lead to significant financial penalties (up to 10% of global turnover), exclusion from public tenders, as well as consequences for individuals involved (including director disqualification and, in rare cases, criminal liability).
In the UK, competition enforcement dawn raids are most commonly conducted by the Competition and Markets Authority (CMA) (though can also be carried out by sector regulators). CMA raids have been relatively rare in recent years as much of the CMA’s competition enforcement has focused on abuse of dominance cases against the largest tech companies. However, recent speeches by the CMA’s Executive Director for Competition Enforcement, Juliette Enser, signal a shift to refocus on illegal interactions between competitors. This in turn makes one thing certain: dawn raids are set to become more common.
Where not managed actively, dawn raids can cause chaos that exposes businesses to fines for non-cooperation, and even more critically, can lead to “own goals” that make defending any investigation more difficult. Here, we summarise five key steps that businesses can take to ensure they are prepared if the CMA comes knocking…
1. Have a plan (i.e. a team)
When inspectors arrive at reception, the reception team should know who to call. Having an established response team familiar with the rules around dawn raids can be critical in the early moments of an inspection, which is one of the highest risk parts of a dawn raid. The response team should include lawyers, employee / public relations contacts and critically, IT support. In addition to being familiar with dawn raid rules, this core group should know which external providers to call for support.
Meanwhile, it is critical that employees (especially the IT team) are trained to know what to do in the event of a dawn raid. In particular, they should be aware of the obligation not to destroy, modify or conceal evidence, which extends to instant messages and personal devices, irrespective of where these are stored.
2. Know the latest rules
The Digital Markets, Competition and Consumers Act (DMCC) came into force on 1 January 2025, strengthening the CMA’s powers to conduct dawn raids, including at domestic premises, and increasing penalties for obstruction. The CMA can now seize personal devices from domestic premises and examine them offsite. Additionally, penalties for obstructing dawn raids have been increased from a maximum of £30,000 to up to 1% of a company's global turnover, or a daily penalty of up to 5% of daily global turnover.
3. Be prepared for home raids
In addition to dawn raids at business premises, the risk of home raids is now significant. A recent High Court decision1 has confirmed the threshold for the CMA to obtain search warrants for raiding individuals' homes is the same as business premises. This decision reflects the changing work environment, with more business-related activities occurring at home due to remote working. Businesses must now prepare for the possibility of home raids, ensuring that employees are aware of their rights and responsibilities during such inspections, particularly in relation to deletion of data on personal devices.
4. Dawn raids worldwide
Many dawn raids occur in multiple locations simultaneously, which can span multiple countries. The CMA is very active in supporting international cooperation on dawn raids, having recently led a project to update the dawn raids chapter of the Anti-Cartel Enforcement Manual for the International Competition Network (ICN). Speaking of this project, the CMA’s Senior Director of Competition Enforcement Lucilia Falsarella Pereria described dawn raids as “one of the most effective evidence gathering tools in competition enforcement and the fight against illegal cartels”.
Juliette Enser’s recent speech also stressed “how vital international cooperation remains to competition enforcement work”. International cooperation is the norm in international cases and some of the CMA’s recent raids have been coordinated with competition authorities in other countries. This means that businesses’ dawn raid preparation needs to include a plan to alert other locations and enlist local support wherever the inspectors appear.
5. Ensure your device and document retention policies are dawn-raid ready
The CMA is likely to demand access to employees’ mobile phones and other devices including, where relevant, their personal devices. Make sure employees are aware of the risks of using their personal devices for work purposes (i.e. they might have to hand them over in a dawn raid) and have procedures in place to get employees’ mobile devices / data if they are out of office. If devices are never used for work but subject to a warrant, it may be possible to negotiate on the day.
Be prepared to issue, and implement, hold notices across the company upon the start of a dawn raid or other information gathering exercise by the authorities. A key aspect of this will be to have a plan to halt routine deletions, including of instant message based communication like Teams and WhatsApp, even where these are ephemeral by design.
Many businesses have a plan for dawn raids, but with the rules having changed on 1 January this year, it’s a good time to ensure your plan is up to date. Linklaters offers a Global 24/7 Hotline (+44 20 7456 5055) and a Dawn Raid App which can be downloaded for easy use.
1R (CMA) v The Competition Appeal Tribunal [2024] EWHC 904 (Admin).
