THE HIGH COURT has ruled that the telecommunications regulator is allowed to conduct a search of Eircom’s digital records, in a dispute arising from a scrapped scheme to provide cheaper broadband to wholesaler companies such as Sky.

It arose out of ComReg conducting an unannounced search of Eircom’s offices in Citywest in Dublin last summer, in which it seized hundreds of thousands of documents, on the back of concerns around the scheme which it alleged would contravene the terms of Eircom’s license.

The regulator told the High Court that it had “significant concerns” for market competition over Eircom’s plans to provide a discount scheme for access to fibre broadband to wholesaler customers, including Sky, and wanted to see what level of discussion may have taken place between Eircom and those wholesalers.

Eircom had contested the action saying that any key word search of its digital records by ComReg could reveal privileged information.

It also argued that the scope of the investigation was not sufficiently clear, and this is the reason it refused to make any submissions to ComReg regarding the format of any electronic key word searches.

Of 323,821 documents seized, Eircom said that there 66,643 relevant documents, out of which approximately 7,000 are privileged.

The court case has prevented ComReg from searching the records and it has not had access to the records.

The court heard that ComReg had sought “certain email addresses” of its lawyers, as well as “domains and names of staff and lawyers who would have authored or appeared” on privileged documents.

Ruling

In its ruling, published today, the High Court said it had to decide whether ComReg was allowed under the Communications Regulation Act, 2002 to carry out the search itself.

While the court noted that ComReg power of search and seizure a is “very wide-ranging”, it said that it seemed clear that these powers are for the purposes of the regulator’s objectives of promoting competition in the market and ensuring compliance.

The court further said it is not a precondition of a search and seizure operation by ComReg, that it has to have obtained a warrant from a District Court judge ahead of the conducing the operation.

The ComReg investigation commenced after Eircom announced the discount scheme.

Discount scheme

ComReg informed Eircom that this proposed discount scheme did not meet its regulatory requirements and that it raised concerns regarding the impact it would have on competition.

As a result, Eircom withdrew the discount scheme.

However, ComReg told the High Court that it was still concerned about what happened.

It alleged it was “not necessarily consistent” with Eircom’s regulatory obligations for “Eircom to engage in discussion with other operators in the market about proposed discount schemes’, before the scheme had been approved by ComReg.

As a result, ComReg conducted an unannounced search of the premises of Eircom over three days (31 May 2023 – 2 June 2023) and it seized some of Eircom’s digital data.

Eircom claimed that if ComReg conducts the electronic key word search to remove privileged and irrelevant information, then, “by virtue of ComReg being the party conducting the search”, it is likely that the regulator will have access to certain information.

However, the court noted that “no challenge” was made by Eircom to the legality of ComReg’s search and seizure of the Citywest offices.

“It follows that the legality of the search and seizure is not an issue in these proceedings,” the court added.

For this reason, the court said, the allegedly insufficiently clear scope of the investigation was of no relevance to the judges’ decision as to whether it should approve ComReg’s further operations.

It added that caselaw supports the view that it “would have been preferable” if Eircom had engaged with ComReg in the process of identifying word searches that would eliminate privileged and irrelevant information.

This was particularly so “when one considers that it is Eircom, as the creator or receipt of the Seized Data, is the party best placed to know” the type of irrelevant and privileged information contained in the records, the court said.

Citing caselaw from a case concerning building materials company CRH versus The Competition and Consumer Protection Commission, the High Court said that it expected Eircom to have “sought to engage with ComReg” to agree the electronic word searches.

It added: “This is particularly so since, it became clear at the hearing that the only real issue between the parties in this case, is not whether the search and seizure was lawful or whether the scope of the investigation is too wide, but rather it is who
was going to conduct the Electronic Word Searches to eliminate privileged and irrelevant information from the Seized Data.”

Despite some preliminary engagement and Eircom being “best placed” to suggest and explain to ComReg the word search terms to use, Eircom had “chosen not to seek to progress the finalisation” of the electronic search terms with ComReg.

Eircom is the party best placed to suggest and explain to ComReg the format of Electronic Word Searches which would meet Eircom’s concerns regarding privileged/irrelevant information, but it has failed to do so.

The court added: “As a result, several months have been lost in a State regulatory authority pursuing an investigation, which presumably, it believes is in the public interest, in light of its role in, inter alia, protecting competition in the telecommunications market.”

The court ordered that both parties engage with each other to see if agreement can be reached regarding the issues, without the need for further court time.

The case has been listed provisionally for mention for next Friday in case a resolution cannot be found.