DAWN RAIDS: WHEN THE COMPETITION COMMISSION COMES KNOCKING

It has been more than three years since the Competition Commission’s (“Commission”) last large-scale dawn raid, when it executed search-and-seizure operations at eight insurance firms across South Africa. That raid was a stark reminder that all businesses must ensure robust compliance with the Competition Act. Understanding the procedure, the Commission’s powers, and your rights when investigators knock on your door is essential for businesses across all sectors.

What is a dawn raid?

A dawn raid is an unannounced on-site inspection by the Commission to gather evidence of suspected prohibited practices, such as pricefixing, market allocation and collusive tendering. Inspectors may enter identified premises, search for and secure information, and copy or seize physical and electronic records. They may also conduct brief factual interviews with employees, and coordinate simultaneous inspections at multiple sites, including private residences where business records or devices may be kept. Although commonly referred to as occurring at “dawn”, inspections may take place during working hours and are time-critical. Businesses must cooperate within the lawful scope of the inspection while preserving their rights, including legal privilege.

How do investigators enter premises?

Most raids are conducted under a warrant authorising entry and search of identified premises, issued by a court. When investigators arrive with a valid warrant, entry may not be refused. If necessary, and after clearly demanding entry, investigators may use reasonable force.

What happens once investigators are inside?

Once inside, investigators have extensive powers. They may search for and examine documents, access computer systems (including requesting passwords), and copy or seize items for further examination. The team may include IT specialists who run targeted searches across networks, including for deleted files, using targeted key word searches.

What should you do during a dawn raid?

Despite the Commission’s broad powers, you retain important rights. The following high-level guidance will help you navigate the dawn-raid, while safeguarding your business’ position:

1. Remain calm, cooperative and professional at all times.
2. Contact your legal representatives immediately and request their attendance on site.
3. Verify and copy the warrant and the inspectors’ credentials before allowing access.
4. Request a short pause to allow the legal representative to arrive; if refused, continue to cooperate while keeping records.
5. Keep a detailed log (and, where permitted, video or photographs) of all areas searched and documents inspected or seized.
6. Assert legal privilege promptly; segregate privileged material and request appropriate handling (e.g., sealing for legal representative’s review).
7. Provide information strictly within the scope of the warrant; do not speculate or volunteer unnecessary commentary.
8. Do not destroy, conceal, alter, or remove any documents or devices.
9. Do not obstruct or impede the investigation; channel all queries through your designated point persons.
10. Arrange an immediate post-raid debrief with your legal representative to assess exposure, preserve evidence, and initiate a response plan.

After the raid

Reconstruct what occurred immediately, catalogue copies of all materials taken, interview relevant employees, and engage your legal representative to develop a strategy. Early advice and action can mitigate risk, protect privilege, and position you for any subsequent engagement with the Commission.

How Adams & Adams can help

Dawn raids are a powerful enforcement tool available to the Commission. Their increasing frequency makes preparation essential for businesses across all sectors. Understanding your rights, knowing the proper procedures, and having a response plan in place can make all the difference during a dawn-raid. Being prepared is not just prudent; it is necessary in today’s regulatory environment. Adams & Adams is available to provide representation, comprehensive advice and assistance regarding dawn raids. If the Commission comes knocking, ensure you have experienced legal representation ready to respond.

COMPETITION LAW COMPLIANCE PDF

Co-author
Cara van der Westhuizen (Candidate Attorney)