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A Need to Know Basis: The European Commission’s Approach to Sharing Information Concerning Article 101 TFEU Infringements

October 4, 2013

Things have been heating up since the Court of Justice’s (CoJ) judgment in Pfleiderer (C-360/09), where the CoJ held that, in the absence of  EU-wide legislation on the question, national courts must decide on a case-by-case basis and in accordance with their national procedural laws the level of access a civil plaintiff should have to documents submitted under a cartel leniency programme.  The case ignited the whole debate surrounding plaintiffs’ ability to access documents in the European Commission’s (EC) or a National Competition Authority’s (NCA) file.

To some extent, the EC has proposed a way to deal with the issue in its draft “Directive on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union” (Directive on Antitrust Damages Actions).  But, with all due respect to the legislative process, it will most likely be at least one to two years before the final version of the Directive on Antitrust Damages Actions resurfaces from the EU political machine, and then another two years before it is fully implemented in the Member States.  Furthermore, the Directive on Antitrust Damages Actions will not cover every conceivable scenario: there will still be instances where a civil court hearing damages claims will conduct a case-specific analysis to determine whether certain documents should be handed over to plaintiffs. This means that another three to four years may pass before the legislation is fully functional.  In the meantime, at national level, potential plaintiffs and defendants (and both parties’ counsel) are going to have to navigate some fairly rough waters.

Access to Documents:  EU Competition Law vs. the Transparency Regulation

At the EU level, in addition to the proposed Directive on Antitrust Damages Actions, (potential) plaintiffs’ access to information has evolved in at least two ways.  First, the tug-of-war between EU competition law and Regulation 1049/2001 regarding public access to documents (Transparency Regulation) seems to have come to a close – with EU competition law clearly being the winner.

This is particularly the case as a result of the General Court’s (GC) ruling on September 13, 2013 in The Netherlands v. Commission (T-380/08).  The background of the case is as follows:  in 2006, the EC found that a number of suppliers and purchasers of road pavement bitumen in the Netherlands had engaged in anti-competitive behaviour and were found to have infringed Article 101 TFEU.  While the EC published a non-confidential version of its cartel decision, it subsequently revised it to redact certain information and passages.  Among the potential plaintiffs was the Dutch government.  Since the newly redacted version of the EC’s decision did not contain information that the Dutch government believed it needed in order to decide whether to bring a civil action for damages, it requested a copy of the EC’s confidential version of the decision.  The EC denied the request by invoking several of the exceptions provided by Article 4(2) of the Transparency Regulation.

The Netherlands lodged an appeal before the GC. However, the GC stayed proceedings until the higher court, the CoJ, rendered its ruling in the TGI case (C-139/07 P) on June 29, 2010, which concerned a request for access to the entire state aid file held by the EC. The EC denied access on the ground that the state aid regulations do not provide any right of access for parties other than the Member State concerned. The CoJ, in Grand Chamber, followed the EC and acknowledged “the existence of a general presumption that disclosure of documents in the administrative file undermines protection of the objectives of investigation activities.”  Therefore, the EC did not have to inter alia consider each document individually under the Transparency Regulation.

Subsequently, on June 28, 2012, the CoJ adopted its judgment in Odile Jacob (C-404/10 P), which largely borrowed from TGI in order to rule on a request for access to parts of an EC merger control file.  Here the Court held that the general presumption against disclosure of categories of documents (which applied to state aid cases as a result of TGI) was also available in the context of EC merger control proceedings.

While the CoJ was busy carving out various areas of EU competition law, thereby limiting third parties’ access to documents, the GC was trying to create a more plaintiff-friendly atmosphere with respect to Article 101 TFEU infringements in CDC Hydrogen Peroxide (T-437/08, December 2011) and EnbW (T-344/08, May 2012).  Among other things, the GC held that, when a party requested access to documents concerning a cartel, the EC could not deny access by relying on a general presumption that the documents were covered by one of the exceptions in the Transparency Regulation.

However, after having the CoJ overturn its judgments in both TGI and Odile Jacob, the GC finally got the hint in the Netherlands’ case.  The GC took stock of the aforementioned CoJ rulings and reasons by analogy in order to decide whether the EC was justified in denying the Dutch government access to the EC’s confidential version of the cartel decision in Bitumen.

The GC started its analysis by acknowledging that, as in the context of state aid and merger control, EC cartel enforcement is governed by Regulation 1/2003, which is on the same legal footing as the Transparency Regulation.  As a result, neither regulatory framework takes precedent. The GC then noted that the information that the Dutch government was requesting access to concerned inspection, audit and enforcement activities of the EU institutions, which, as such, are covered by one of the exceptions of Article 4(2) of the Transparency Regulation.  Furthermore, under Regulation 1/2003, the information enjoyed a high level of protection against disclosure, as it related to the commercial interests of the undertaking concerned.  Article 4(2) of the Transparency Regulation also provided for a similar exception against disclosure.

The GC concluded, as a result, that the EC may invoke several exceptions concurrently to deny disclosure of specific information in its file. In doing so, the EC may rely on general presumptions “which apply to certain categories of documents, as similar general considerations are likely to apply to requests for disclosure relating to documents of the same nature.” Such presumptions would apply irrespective of whether the request relates to a pending or closed cartel proceeding.  Finally, the GC indicated that it is for the party seeking access to rebut the presumption, in view of the existence of an overriding public interest in disclosure.

The GC also denied the Dutch government’s request for access to the confidential version of the Bitumen decision.  In so doing, the GC made a number of interesting points, but here, we will only briefly summarize three.  First, the concept of commercial interests should not be limited to legitimate and legal activities of the undertaking concerned.  The GC considered that, so long as a cartel decision is subject to judicial review, an undertaking has a right to protect its reputation and dignity.  Second, the GC indicated that a request for access to documents under the Transparency Regulation, the purpose of which is to enable the requesting party to seek damages for cartel violation, pursues a private interest.  As such, it does not fulfil the overriding public interest criteria.  Third, the GC considered that access to cartel documents should be arbitrated by the national court before which an action for damages has been lodged.  In addition, in accordance with Article 15 of Regulation 1/2003, national courts may ask the EC to transmit to them relevant information in its possession.   

The GC has, therefore, slammed shut the door for expanded access to EC cartel documents under the Transparency Regulation.  As a result, if a plaintiff wants access to documents relevant to its (potential) case, it must seek them under the national rules of civil procedure and, following Pfleiderer, judges have to embark in a cumbersome balancing test between public and private interests. 

The Potential for Expanded Non-Confidential Cartel Decisions

The second way that (potential) plaintiffs’ access to information has evolved has occurred as a result of the EC’s approach to the publication of non-confidential versions of cartel decisions.  Here the EC seems to contradict the rather strong position it has taken vis-à-vis providing access to files under the Transparency Regulation.  In this respect, an order by the Vice-President of the COJ in Pilkington Group Ltd (C-278/13 P, September 10, 2013) makes for some interesting reading.

Pilkington was a member of the Car Glass cartel.  At the end of the proceedings, after consulting with the various addressees of the cartel decision, in February 2010 the EC published a non-confidential version of the decision on its website.  On April 28, 2011, the EC informed the addressees that “for reasons of transparency” it planned to publish a more expanded non-confidential version of the cartel decision.  Press clippings hint that the EC has been revisiting older decisions and declassifying information it believes are no longer confidential.  The EC planned to make public: 

  • Category I:  customer names, product names/descriptions of products
  • Category II:  the number of parts supplied by each addressee, the share of the business of a particular car manufacturer, pricing calculations or price changes, etc.
  • Category III:  information that might identify certain members of staff

Pilkington objected to the publication of the additional information, went before the Hearing Officer, and ultimately filed applications with the GC to: (i) annul the revised decision and (ii) obtain interim measures.  The main case is still pending.  The GC granted the interim measure suspending publication of the contested decision – the EC appealed.  It is worth a pause to examine three of the EC’s arguments in the appeal. 

First, the EC argues that Category I and Category II information needs to be public so that potential victims of the car glass cartel can “establish the requirements of any claim in damages.”  Second, undertakings involved in competition law proceedings usually have predominately economic interests in protecting the secrecy of their information.  Whether disclosure would cause irreparable harm depends on a combination of factors, such as commercial usefulness of the information for those who provide it and other market participants.  Third, the information in question was more than five years old and had been exchanged among the cartel members.  Therefore, the EC does not believe that it was confidential and Pilkington needs to explain why each individual piece of information is in fact confidential.

This is an interesting turn of events.  Under the Transparency Regulation, the EC categorically denies third parties – potential victims of cartels – access to documents as shown in the cases discussed above, including the most recent one in Bitumen.  The EC invokes a number of exceptions to deny access to documents.   Among other things, the exceptions are meant to prevent the undertaking involved in the cartel from suffering harm as a result of its business secrets, etc., being disclosed.  Again, refer to the Bitumen, above.  Inevitably, information in the EC’s file will include documents that are more than five years old – in Bitumen the cartel was from 1994 until 2002 – and the file must be chuck full of documents that include information that is being shared among cartel members. 

The EC appears to have adopted a “need-to-know” approach.  The Transparency Regulation is seemingly dead and in the ground: private litigants are unlikely to have direct access to EC files.  The most plaintiffs can hope for now is meaty non-confidential versions of the cartel decisions, which will inter alia allow them to assess the likely success of follow-on actions. Interestingly, this should only apply to cartel cases that do not result in settlements.  This is because settlement decisions are far more concise than standard cartel decisions.  In those cases where the parties can not settle – which may in the future become the exception rather than the rule – the EC seems to be prepared to limit scope for the cartel participants to claim protection of their business secrets and other confidential information.  It is a wonder how the EC will approach the disclosure of information in cartel settlement decisions vs. full cartel decisions in the coming months.  While this may sound like wonderful news for cartelists, it may simply be a matter of swapping one set of problems for another.

NB:   EnBW appealed – see our subsequent briefing Access to DG Competition’s Files Through the Transparency Regulation: An Uphill Battle for Cartel Damage Claimants

For additional material on this topic and related topics, please refer to our following publications: