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Fri May 24 2024

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Cartel busters win right to search homes

22 Apr The Competition & Markets Authority has won an important legal challenge in the High Court, giving a boost to its investigations into collusion in the construction admixtures industry.

The High Court has today found comprehensively in favour of the Competition & Markets Authority (CMA) – on all three of its grounds – after the CMA sought judicial review of certain decisions made by the Competition Appeal Tribunal (CAT) relating to search warrants. 

In October 2023, the CMA applied for warrants to search business and domestic premises as part of its investigation into suspected anti-competitive conduct regarding the supply of chemical admixtures for use in the construction industry. The CMA conducted raids to gather evidence as part of its investigation.

While the CAT granted warrants authorising the CMA to search three business premises in England and Scotland, it refused the warrant regarding the domestic property. The CAT said it was necessary for the CMA to identify specific evidence demonstrating that an occupier of the property had a “propensity” to destroy physical or electronic documents held on their property – as their suspected involvement in a secret cartel was not enough.

The CMA was concerned that the CAT’s decision would damage its ability to gather the necessary evidence to effectively investigate and enforce against secret cartels, particularly given the CAT’s indication that the warrants judgment was a guideline case to be followed in the future. As such, the CMA applied to the High Court for judicial review in December 2023.

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The High Court agreed with the CMA that the CAT had made an error in its application of the law – namely, that it was incorrect to state that specific evidence of a “propensity” to destroy electronic or physical documents was always required for a domestic search warrant, and that the CAT’s judgment should not therefore be followed in future cases. 

CMA chief executive Sarah Cardell said:  “We welcome this important ruling from the High Court, which found comprehensively in our favour on all three grounds. The original judgment by the Competition Appeal Tribunal risked seriously undermining our ability to enforce effectively against illegal cartels.

“With the increase in remote-working – and electronic communication – it’s essential that we are able to search domestic premises to secure evidence of potential breaches of competition law where appropriate to do so.”

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