The High Court in England has ruled that it can order companies accused of breaking competition rules to require employees to disclose work-related communications stored on personal electronic devices.

The court was dealing with a disclosure and inspection dispute in relation to a competition damages claim filed by a mobile phone retailer. Phones 4U’s insolvency administrators claimed against four mobile network operators who had cut off supplies to Phones 4U and were accused of doing so collusively. According to competition court rules, the court may only permit disclosure or inspection that is proportionate considering the legitimate interests of all parties and third parties concerned. In particular, the court must consider the extent to which the claim or defence is supported by available facts justifying the request to disclose evidence and the scope and cost of disclosure, especially for any third parties concerned. The court must not order non-specific searches for information unlikely to be of relevance.

The defendant operators denied that they were involved in any collusive or anticompetitive conduct and that the decisions to cease supplying Phones 4U were taken by those respective companies individually for sound commercial reasons.

Personal data

The court was asked to order the companies to share information relating to key officials’ mobile phones and email accounts.

UK disclosure rules in private competition claims require defendant companies to hand over all relevant documents, which includes electronic communications, ‘in the possession or control of’ an agent for that company. These rules are specific to competition law litigation due to an obvious asymmetry of information between the alleged participants in the collusion and the claimant. A private claimant faces significant challenges in seeking to prove that parties engaged in collusion.

The court said that it is well-known that where companies engage in unlawful, collusive behaviour, the individuals involved sometimes use their personal devices and may deliberately avoid using their work email or work devices. In such a case, an employee is undoubtedly acting as an agent for their company. A court’s ability to order disclosure of information on personal devices will become increasingly important as employees work more from home, where they may not have a separate work computer or an additional mobile phone provided by their employer.

The court acknowledged that an employee’s personal device contains a lot of personal and private information and stated:

• The court must ensure that the order interferes with the individuals’ rights as little as possible.
• If any of the employees refuse to turn over their personal devices, it will be for Phones 4U to consider what if any steps it wishes to take.

The defendants were ordered to provide Phones 4U with a list of employees sent a ‘hold notice’, which asked them not to delete communications sent and received within a specific date range as they could be relevant to the case. Each defendant was ordered to write to four of their custodians, selected by Phones 4U, to request access to their personal mobile telephones and emails for the purpose of searching for work related communications over the relevant period relevant to the issues in this case, and provide to Phones 4U copies of their letters and any replies. The search would be done by independent IT specialists who were bound to protect the employees’ private information.

This is a far-reaching order and we have probably not heard the last of it.