Confidential or Not Confidential: To What Extent Can the European Commission Publish Leniency Information in Its Decisions?

On March 14, 2017, the European Court of Justice (CoJ), setting aside the judgment of the General Court (GC) in the Evonik Degussa v Commission case (C‑162/15 P), delivered an interesting judgement clarifying that (i) the European Commission (EC) cannot disclose in its decisions information taken from the statements made by leniency applicants and (ii) the hearing officer (HO) is qualified to review the applicants’ confidentiality claims based on general principles of EU law.

Background

In 2006, the EC imposed a fine of €388 million on 9 companies which had been parties to a hydrogen peroxide & perborate cartel. The EC found that Evonik Degussa had participated in the cartel, but granted the company complete immunity from fines under the Leniency Programme.

In 2011, the EC informed Evonik Degussa about its intention to publish a more complete version of its cartel decision, following the publication of a first version in 2007. Evonik Degussa contested the proposed publication as this version of the decision would have included, inter alia, confidential information and business secrets supplied in the context of the Leniency Programme. Following the claim raised by the company, the EC decided (i) to delete part of the information, such as the names of Evonik Degussa’s collaborators or other information that would have identified the undertaking, but (ii) to disclose the rest of the leniency information.

Dissatisfied with the position taken by the EC, Evonik Degussa referred the matter to the HO, requesting him to deny permission to the EC to publish in its decision information provided under the Leniency Programme, relying on the principles of (i) protection of legitimate expectations and (ii) equal treatment. The HO rejected the request on the grounds that:

• He was only able to consider “whether information should be regarded as confidential” but “not to remedy an alleged breach of the appellant’s legitimate expectations by the Commission;”
  
  
• He was not competent to answer whether or not the disclosure to third parties of the information supplied to the EC in the context of the Leniency Programme would harm this program and would constitute “unwarranted difference in treatment” compared to other participants of the cartel, as such requests are “outside the scope of his terms of reference;”
  
  
• Evonik Degussa contested the publication of the more complete version of the decision only because such publication would have been “detrimental to it in the context of actions for damages brought before the national courts;” and
  
  
• Evonik Degussa did not demonstrate that the publication at issue was “likely to cause it serious harm.”

Evonik Degussa went on in this battle and together with Akzo Nobel, another participant to the cartel, lodged an action for annulment before the GC against the EC’s decision. On January 28, 2015, the GC rejected the applicants’ request for confidential treatment of the material supplied to the EC under the Leniency Programme.  

In particular, the GC held that:

• “[A] document did not benefit from protection solely because it had been communicated in the context of a leniency application and that the proposed publication did not harm the objectives of its investigations.” It drew a distinction between “access by third parties” to leniency documents in the EC’s file and the disclosure of information relating to an infringement following publication of the EC’s infringement decision;
  
  
• With reference to the publication, it is for the EC and not for the applicant to balance the protection of the objectives of its investigations and the effectiveness of the Leniency Programme with the interests of the parties in being “aware of the content of its decision and acting in order to protect their rights;”
  
  
• The principles of legitimate expectations and equal treatment raised by Evonik Degussa before the HO are not meant to protect documents against disclosure to the public.

The GC concluded that the HO had not breached the principles of legitimate expectations and equal treatment as it was correct to decline competence to answer the objections to the publication at issue.

The CoJ Ruling

On March 14, 2017, the CoJ set aside the judgment of the GC, in so far as that judgment held that the hearing officer was “correct to decline competence to answer the objections raised by Evonik Degussa” and ruled the following:

• With reference to the scope for publication of leniency information, the CoJ made a clear distinction between the publication of verbatim quotations of information taken “from documents provided by an undertaking” to the EC “in support of a statement made in order to obtain leniency” and “the publication of verbatim quotations from that statement itself.” While the first type can be published “subject to compliance with the protection owed, in particular, to business secrets, professional secrecy and other confidential information,” the latter “is not permitted in any circumstances."
   
• As regards the role of the HO in reviewing claims for the confidential treatment of leniency information, the GC had erred in law in holding that the HO was “correct to decline competence to answer the appellant’s objections to the proposed publication raised on the basis of the observance of the principles of the protection of legitimate expectations and equal treatment.” On the contrary, the HO must always “examine any objection based on a ground, arising from rules or principles of EU law, relied on by the interested person in order to claim protection of the confidentiality of the contested information.”

In conclusion, the CoJ partially annulled the judgment of the GC in so far as the HO declined competence to respond to Evonik Degussa’s objections, while the remainder of the appeal was dismissed.

Food for Thought?

This case is noteworthy for two reasons:

• First, the clarification of the rules on the publication of leniency-related information in EC decisions is welcome as this evidence is increasingly important for plaintiffs in the context of the implementation of the Directive on Private Damages and the expected resulting rise in damages actions before national courts. In addition, it can be noted that the distinction made in this judgement between the leniency statement and supporting evidence is in line with the Directive’s approach to the disclosure by the judge of evidence included in the file of a competition authority; under the Directive, a judge is prohibited from ordering the disclosure of leniency statements, but remains silent on supporting evidence, leaving the door open to their disclosure.
  
  
• Second, the role of the HO is clarified and somehow broadened as the CoJ confirmed that its competences also encompass the examination of confidentiality claims based on general principles of EU law, such as the protection of legitimate expectations.