On 24 September, the CMA issued its first ever civil penalties against individuals for dawn raid obstruction. Construction firm M&J Group, along with two staff members, were fined a total of £50k (£25k on the individuals) for hiding a mobile phone and documents during an inspection, in breach of clear instructions from the CMA.
While the headline fine may be relatively modest in the context of regular CMA fines, the maximum penalty on companies has increased since the investigation under new rules. Moreover, the CMA’s willingness to fine individuals – including administrative employees – is a warning shot that, in the right case, the CMA is prepared to impose financial personal penalties on those who flout its rules.
Facts of the case
The CMA’s inspection of M&J took place as part of a wider investigation into 12 construction companies suspected of bid-rigging. During the inspection, M&J’s Estimating Director, Barry Pirrie, instructed M&J’s Office Manager, Tracey Woods, to remove a work mobile phone and paperwork from the company’s premises to prevent the evidence from being found by CMA investigators. Mr Pirrie also falsely told CMA officers that he did not have a work mobile phone.
Although the items were brought back and handed over later that day, the CMA found that concealing the evidence, even temporarily, risked the loss of relevant information, and wasted valuable investigative time and resource.
The CMA issued fines on the two employees of £20k (on Pirrie) and £5k (on Woods), in addition to a general fine on the company of £25k. The fines are separate from the overall investigation into bid-rigging allegations, which is still ongoing.
How serious are the penalties?
Under the CMA’s civil enforcement powers, it has the power to impose penalties of up to £30k on individuals (or a lower daily rate). Note that the maximum penalty on businesses was, at the time of the inspection, also up to £30k, but this has now increased (following changes introduced by the Digital Markets, Competition and Consumers Act 2024) to a maximum of 1% of the undertaking’s turnover, 5% of the undertaking’s daily turnover, or a combination of both. The maximum penalties for individuals have not changed.
CMA increasingly turning personal
The fines mark the first exercise of these powers by the CMA on individuals. In previous cases involving obstruction during an inspection, fines have only been imposed on the company e.g. against Fender Europe in 2019, for concealment of notebooks by a senior officer during an inspection. But it also reflects a broader trend in enforcement – the CMA has increasingly turned to personal responsibility where companies breach competition law, through the rising prevalence of director disqualification. In its prosecution of 10 construction firms for bid rigging on demolition and asbestos removal contracts in 2023, four directors were disqualified from acting as directors for nearly 25 years in total (regardless of whether they were aware of the underlying breaches).
These fines show that the CMA is now willing to fine individual employees for obstructive conduct in an investigation, independent of whether there has been a breach of competition law.
Increasing procedural fines for obstruction of investigations
The UK is not alone – elsewhere, regulators are similarly ramping up their focus on procedural cooperation. In June 2024, the European Commission issued a €15.9 million fine on a company for obstruction after a senior employee deleted WhatsApp messages exchanged with a competitor during a dawn raid. Equally, the provision of incomplete information during an investigation has resulted in numerous recent fines, including €1.3 million by the Italian Competition Authority last year on Ryanair for allegedly failing to provide complete and correct information in an antitrust investigation.
What does this mean for businesses?
The message from the CMA is clear – how you behave during an investigation may be scrutinised as closely as the conduct under investigation.
We set out our key takeaways from the decision and recent developments below:
- Dawn raid preparedness is a personal risk issue, not just a corporate one. Mishandling an inspection (by hiding a device, giving an inaccurate answer or deleting messages) can result in fines or disqualification against employees / directors personally, regardless of what the underlying investigation ultimately finds.
- “It was only for a few hours” is not a defence. The CMA fined M&J’s staff even though the phone and documents were returned the same day. Temporary concealment is treated as seriously as permanent destruction.
- Front-line staff, not just senior management, need training. Following changes under the DMCCA, the CMA’s investigatory powers extend to cloud storage and ephemeral messaging, and interview powers have been enhanced, making more people across an organisation potential points of exposure during a raid.
- Clear dawn raid protocols – including instructions not to move, hide, or delete anything, and immediate escalation to legal counsel – are essential, and should cover personal devices and messaging apps, as much as company systems.
- Individual legal advice matters. Given the personal stakes, employees facing scrutiny during an investigation may wish to consider seeking their own legal advice, separate from the company’s, at an early stage.
For further information, please contact:
Jonny Ford, Partner, Linklaters
