The Competition and Markets Authority (CMA) declared victory as the High Court confirmed the standard of evidence needed to secure warrants to search domestic premises.  The Competition Appeal Tribunal (CAT) had refused to grant a domestic search warrant to the CMA in connection with a cartel investigation.  It held in a judgment of October 2023 (the CAT Judgment) that a “higher order of scrutiny” [1] was required for domestic warrants than for business premises warrants, in order to protect individuals’ rights to a private and family life under Art. 8 of the European Convention on Human Rights (ECHR).

The High Court overturned the CAT’s decision in a judgment published on 22 April, concluding that the CAT had applied the wrong legal standard.  It found that applications for domestic warrants should be subject to the same standard as applications for warrants to search business premises.

CAT sets high bar for CMA to obtain a domestic warrant

Under the Competition Act 1998, the CMA can apply for warrants to search both business premises (s.28) and domestic premises (s. 28A).  The wording of statutory test is the same for both.  In particular, the CMA must have “reasonable grounds” for suspecting that if the documents were required to be produced, they would be “concealed, removed, tampered with or destroyed.”

The CAT had held that, for business premises warrants, the CMA is entitled to a “strong following wind” that this threshold is met when the CMA suspects cartel activity may have occurred.[2]

Conversely, it held that “something more to suggest a propensity to destroy needs to be asserted in evidence” when applying for a domestic warrant.[3]  The CAT considered this higher bar was necessary to protect individuals’ Art.8 ECHR rights.  The CAT denied a warrant to search a domestic premises because the CMA had failed to adduce such evidence.

The High Court reverses the CAT Judgment

The CMA sought a judicial review of the CAT Judgment, despite no longer seeking a warrant in respect of the domestic premises in question.  The CMA argued that it was important to clarify the law, given the CAT’s indication that the CAT Judgment should be used as a ‘guideline’ judgment for future cases.

The High Court held that the CAT had erred in law by finding that in all instances the CMA needed to adduce more evidence than the inference of a secret cartel in order to obtain a domestic search warrant.  The High Court did not opine on the application of the ECHR to domestic warrant applications, which had proved decisive in the CAT Judgment.  Instead, the High Court found that both applications for warrants should have been assessed according to the same standard.  The High Court found that on account of this error of law, the CAT judgment should not be considered a ‘guideline judgment’.

Implications for CMA’s investigatory powers

The High Court’s judgment provides an important clarification of the standard that applies for the CMA to obtain domestic warrants.  Applications for domestic warrants are likely to become an increasingly common feature of the CMA’s information gathering processes in cartel investigations, in light of increased trends towards working from home, and individuals storing work-related data on personal devices.

This judgment also comes at a time when the incoming Digital Markets, Competition and Consumers (DMCC) bill is expected to expand the scope of the CMA’s powers to search domestic premises further.  Notably, the DMCC will extend the ‘seize and sift’ powers already available to the CMA when searching business premises to domestic premises, allowing the CMA to seize materials where it cannot reasonably determine on site whether such materials constitute evidence relevant to its case.

[1]              Competition and Markets Authority v Another [2023] CAT 62, para 15(4).

[2]              Ibid., para 15(1).

[3]              Ibid., para 15(4).