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A New Age For Investigations – Prepare for Agencies to Come Knocking

Deba Das


Partner, London


Jamillia Ferris


Partner, Washington, D.C.

Tobias Klose


Partner, Düsseldorf


Alicia van Cauwelaert

Van Cauwelaert

Counsel, Brussels


Physical dawn raids are back. Virtual dawn raids via extensive RFIs are becoming more commonplace. And antitrust authorities, especially in the United States, are pushing for increased cartel enforcement by scrutinizing (through broader powers and greater coordination with other agencies) what they regard as an increased potential for collusion – where legitimate cooperation among competitors is more frequently pursued to address economic and social crises. Are you ready if an authority comes knocking?

Authorities in Europe are on the hunt again (and with more teeth)

After a decline in dawn raids during the global pandemic, at least 15 different European antitrust authorities conducted more than 40 raids in the first nine months of 2022. High-ranking officials of various authorities, including the EC, the German FCO and the UK’s CMA, have clearly articulated that the days of refraining from dawn raids due to the pandemic are over – they are back, and they are just getting started.

Key trends we are seeing when steering clients through this latest wave of dawn raids include:

  • authorities increasingly carrying out “copy and dash”-style raids, showing less interest in going through physical materials and instead focusing more on seizing significant amounts of electronic data – no matter the format (chat protocols, Sharepoint data, etc.) or where it is physically or virtually stored (on private phones used for business purposes, on cloud servers outside their jurisdiction, etc.);

In-house counsel and external dawn raid advisors need to know the rights of the company and individuals, be aware of the precise data collection powers of each authority and know what the limits are, particularly when it comes to accessing personal data.

Deba Das
Antitrust and Dispute Resolution Partner, London

  • regular home working bringing challenges to companies when being raided, e.g., due to an increased risk that their trained on-site staff might simply be outnumbered by officials (especially at the outset); and
  • working from home also is increasing the risk that authorities raid not only company premises but also private homes – a trend companies and their executives have rightly become increasingly worried about; the head of the EC’s Cartel Unit has specifically said that such domestic raids are a response to the shift to home or hybrid working.

Domestic raids are particularly challenging, especially in jurisdictions like Germany or the UK where authorities can and do impose sanctions against individuals so that the latter might start cooperating in a way from which the company cannot benefit.

Tobias Klose
Antitrust Partner, Düsseldorf

Now is the time for companies to ensure that their dawn raid trainings and guidelines are fit for purpose with a view to these new developments and that they have experienced dawn raid counsel by their side if an authority strikes in the post-pandemic world – be it at the company’s premises or at the general counsel’s or CEO’s private home.


And the authorities are thirsty for even more powers

Changes in approach and regime reform globally are leading to clear expansion and increased application of enforcement powers, particularly in the United States. The DOJ has keenly focused on increasing criminal enforcement of no-poach and wage-fixing issues, already pursuing five criminal actions and bringing two to trial. These cases illustrate the potential for a wage-fixing or no-poach agreement to be a per se criminal violation. Even more recently, the United States has seen a revival of criminal enforcement of monopolization or attempted monopolization under Section 2 of the Sherman Act, with the DOJ securing a guilty plea in its first Section 2 criminal case in more than four decades.

While the DOJ’s criminal enforcement is heating up, its leniency program is losing steam (as is the case across many jurisdictions globally). The costs and uncertainty with seeking leniency – including the prospect of follow-on private litigation and exposure to liability in other jurisdictions – has greatly reduced its leniency pipeline. As a result, the DOJ is turning to other creative methods of detecting cartel activity, including through merger investigations, private litigation and initiatives like its Procurement Collusion Strike Force (PCSF).

In addition to increased enforcement activity, antitrust authorities are also increasing interagency coordination domestically and interjurisdictional cooperation abroad. The UK, in particular, is now looking to sign further cooperation agreements with authorities in the United States, Australia, New Zealand and, potentially, Japan and South Korea. In the United States, coordination among federal agencies continues to increase, including with the DOJ’s recent announcement of additional enforcement partners in its PCSF.

Invasive requests for information – caution the ‘fishing expedition’

Authority requests for information across Europe, the United States and APAC are getting broader and expectations for compliance more forensic. A key element of this in Europe is the authorities’ use of generic search terms to extract documents relating to specific custodians over significant time periods. With typically limited opportunity for negotiation on the scope of the request, and with significant fines for noncompliance, companies can find themselves in an impossible position, being required to hand over significant amounts of data and many documents with no relevance to the matter at hand and, in some cases, no privacy-related filter. Some agencies have gone even further, sending sweeping RFIs to a whole industry asking whether the addressees had any exchange with competitors.

Such requests can feasibly be regarded as a kind of “virtual dawn raid.” Unlike a dawn raid with core protections based in case law, however, the scope for irrelevant but still sensitive business documents to end up in the authority’s case file is much greater. Antitrust authorities appear to be seeking carte blanche to conduct a “fishing expedition” – being able to pick up on other potential lines of inquiry outside the scope of their original investigation – and are testing the boundaries of their powers in this regard. We are already acting on cases before the EU General Court on these issues.

Where authorities are requesting the production of documents hitting on broad search terms, seeking a compromise position, for example by offering access through the use of a virtual data room, can help mitigate the risk of large swaths of irrelevant but sensitive documents ultimately ending up on the authority’s case file.

Alicia Van Cauwelaert
Antitrust Counsel, Brussels

It is worth noting that companies are not eligible for any leniency discount as a result of providing responsive information or documents that have been asked for pursuant to a request for information. Companies therefore need to consider whether to get out ahead of the authority and assess their risk in relation to closely linked business lines to that of the business directly impacted by the investigation or to audit their wider business, to be able to self-report potentially broader infringements and/or additional breaches in order to secure more lenient treatment (so-called leniency plus).

Companies need to consider how best to handle these large document requests from authorities, including the risk that such broad requests may inevitably produce documents that also contain private information about employees or other individuals, thereby adding another layer of complexity in terms of data privacy considerations. Moreover, companies should keep in mind the risk of US litigants seeking automatic discovery of documents submitted to antitrust authorities in the UK and the EU. Preventing this type of discovery in the United States can be difficult for some types of documents, and the DOJ may also subpoena US plaintiffs to obtain any documents they receive. Having joined-up transatlantic counsel is therefore key.

Looking ahead in 2023

  • Be match-ready when the authority strikes.
    • Make sure to equal authorities’ dawn raid teams even in times of hybrid working by having a basic “first responder” checklist that works for a broad range of potentially available employees.
    • Have dedicated dawn raid trainings for IT specialists (including outsourced functions) who need to be available to answer any technical questions officials may have.
    • Update your dawn raid guidelines and trainings in light of the new challenges resulting from copy-and-dash-style raids and raids of private premises.
  • Assess risks across all business areas.
    • While an authority may be probing one issue, broad powers for requesting information can inadvertently bring into scope other business areas. Being on top of potential issues across the entire business is key to assessing risk on an ongoing basis.
    • Be open and creative in ways of responding to authority requests with a view to finding a compromise that may better protect both the company and individuals’ privacy rights.
  • Keep in mind authorities’ push for increased cartel enforcement.
    • Remain vigilant to the potential for collusion, particularly in the current environment where legitimate cooperation among competitors may be more frequently pursued to address economic and social crises.

With thanks to Chinwe Chukwuogo, Dominic Divivier and Dan Wylde for their contributions to this theme.

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