Irish Businesses Face Higher EU Dawn Raid Risk Post-Brexit

The European Commission regularly "dawn raids" businesses across the European Union (EU) to try to uncover evidence of anti-competitive deals, abuse of dominance and unlawful State aid. These dawn raids are surprise unannounced visits by a team of European Commission inspectors.

When the European Commission dawn raids a business, it may try to review all records worldwide of that business by seeking access to the IT network of the whole business. The European Commission argues that if the information is available locally then the inspectors may access the data.

Even if the UK leaves the EU, its businesses will still be subject to EU competition law where their activities affect trade between EU Member States. This is just like, for example, US businesses which may be subject to EU fines and prohibitions.

To date, the European Commission would typically dawn raid the business in the UK where it believes there may be evidence of anti-competitive behaviour affecting trade between EU Member States.

Post-Brexit, the European Commission is very unlikely (unless there was a special agreement between the EU and the UK) to be able to dawn raid businesses in the UK. It is quite possible that the European Commission could circumvent that difficulty and dawn raid an Irish subsidiary or affiliate of the UK business and thereby seek to obtain evidence of anti-competitive behaviour which affects trade between EU Member States.

The best way to avoid any issue is to ensure that the competition rules are not breached. But it is worth bearing in mind this new risk because even innocent businesses can be the subject of dawn raids.

For further information in relation to inspections, investigations and Brexit, please contact any member of our EU, Competition and Procurement  team.

Date published: 31 January 2019