Posted by Chantal Lavoie on 15 March 2017
In a judgment delivered yesterday, the Court of Justice (the Court) provides greater clarity on the protection afforded to leniency applicants seeking to prevent the disclosure of certain information in the published version of infringement decisions. The Court also finds that hearing officers have wide terms of reference to decide on objections to the disclosure of confidential information.
The European Commission (the Commission) adopted in 2006 an infringement decision against Degussa and 16 other companies for cartel behavior in the hydrogen peroxide and perborate sector (the PHP decision). Degussa was granted immunity from fines as it was first to apply for immunity under the 2002 Leniency Notice.
Following adoption of the PHP decision, the Commission published in 2007 a non-confidential summary of the decision. In 2011, the Commission then sought to publish a more complete version of the PHP decision excluding confidential information. Prior to publication, Degussa was therefore asked by the Commission to identify any confidential information which it wished to exclude from the version to be published. Degussa objected to the publication of this more complete version on the ground that it would breach the principles of the protection of legitimate expectations and equal treatment. The Commission accepted to remove from the version to be published information which would allow the source of the information and Degussa’s collaborators provided under the 2002 Leniency Notice from being identified. However the Commission refused to treat the rest of the information as confidential.
Degussa referred the matter to the hearing officer and requested that all information which it had provided under the 2002 Leniency Notice be removed from the decision to be published. Degussa’s principal concern was that the disclosure of such information would be detrimental to it in follow-on action for damages brought before national courts and would place it in a relatively less favourable position than the other parties to the PHP decision.
The hearing officer adopted a decision rejecting the request. Because Degussa’s objection to disclosure was not based on the fact that the information contained business secrets but rather that the information had been disclosed pursuant to the 2002 Leniency Notice, the hearing officer concluded that there was no alleged breach of treatment of confidential information. As regards the grounds raised by Degussa for objecting to the disclosure relating to the breach of the principles of legitimate expectations and equal treatment, the hearing officer concluded that this went beyond its terms of reference and that it was not competent to rule on these other grounds. The terms of reference of the hearing officer are set out in Decision 2011/965 adopted in 2011.
On appeal, the General Court agreed with the hearing officer that its terms of reference did not allow it to consider the wider EU law principles of legitimate expectations and equal treatment. This is because these principles were not viewed as relevant in deciding on the specific protection against disclosure which can be granted for such information. The appeal was therefore rejected.
The judgment of the Court
In a brief judgment, the Grand Chamber of the Court decided as follows:
- The role of the hearing officer is to check if any information must be protected on any grounds which could justify protecting confidential information.
- Decision 2011/965 setting out the terms of reference of the hearing officer in the context of competition law proceedings does not explicitly limit the grounds upon which the disclosure of information can be challenged. Moreover, the decision does clearly provide that the mandate of the hearing officer should ‘safeguard the effective exercise of procedural rights throughout competition proceedings’. On that basis, it would defeat the purpose of ensuring such effective enforcement if the hearing officer could rule on a challenge to the disclosure of information only on certain grounds.
- The Court finds that verbatim quotations of the leniency statement cannot be published under ‘any circumstances’. However, verbatim quotations of information contained in supporting documents to the leniency statement should be disclosable in the published decision, ‘subject to compliance with the protection owed’.
- The Court refuses to apply recent case-law having established a general presumption against disclosure of information from the Commission’s competition file to third parties in the context of the application of Regulation 1049/2001 on public access to European Parliament, Council and Commission documents. The Court concludes that the system in place for third party access to the Commission’s file is different from the system in place for the publication of infringement decisions. As a result existing case-law cannot be transposed from one system to another.
- The Court rejects the argument that any information communicated voluntarily by an immunity applicant under the 2002 Leniency Notice should be protected from disclosure in the published version of the decision.
- The Court rejects the argument that publication of information provided under the 2002 Leniency Notice is contrary to assurances given by the Commission under the 2002 Leniency Notice or endangers the effectiveness of the leniency programme. A leniency applicant benefits only from (i) protection with respect to the fine to be imposed and (ii) the ‘documents and statements’ provided pursuant to the 2002 Leniency Notice.
- The Court does not rule on the question whether disclosure of the information provided in the context of Degussa’s leniency application is contrary to the principle of equal treatment. This is an issue to be decided upon by the hearing officer upon re-examination.
- The Court finds that Degussa cannot rely on Article 8 of the European Charter of Human Rights to claim the non-publication of information based on its leniency statement. This is because Degussa failed to provide evidence that disclosure of the information was a foreseeable consequence of participating in the cartel.
This is the first time that the Court addresses the delicate issue of the difference in treatment between leniency statements and information from supporting documents for purposes of publication of an infringement decision. In doing so, the Court draws a distinction between two categories of information, whilst focusing on the concept of ‘verbatim quotations’. The first category consists in ‘verbatim quotations’ of corporate statements made under the leniency notice. The second category consists in ‘verbatim quotations’ of supporting documents to a corporate statement. Here follows a few conclusions and implications which one can draw from the ruling on the protection from publication afforded to leniency applicants:
- The ruling clarifies that ‘verbatim quotations’ from corporate statements made under the leniency notice cannot be published under ‘any circumstances’.
- The Court finds that publication of ‘verbatim quotations’ from supporting documents is permitted subject to compliance with protection to be provided to business secrets, professional secrecy and other confidential information.
- The Court’s ruling focuses on ‘verbatim quotations’. It is not clear to what extent the ruling of the Court can be extended beyond ‘verbatim quotations’. Clearly, leniency corporate statements and verbatim quotations from such corporate statements cannot form part of a published version of an infringement decision under ‘any circumstances’. It is possible, by extension, that publication of any other information which is not a verbatim quote but which is taken from a corporate statement could be incorporated in a published version of a decision, subject to the obligation of the Commission to comply with protection to be afforded to business secrets and other confidential information. Likewise, information from supporting documents to a leniency application could be disclosed in a published version of an infringement decision, subject to the above caveat, regardless whether the information consists in ‘verbatim quotations’ or not.
- It is interesting to note that the Court’s reference to ‘verbatim quotations’ is also an expression used in recital 26 of Directive 2014/104 on actions for damages which refers to the need to exempt from the disclosure of evidence leniency corporate statements but also ‘verbatim quotations’ from leniency corporate statements included in other documents.
The Court’s ruling will have as an immediate consequence a further delay in the publication of the PHP decision adopted in 2006. The hearing officer must now re-examine Degussa’s objection to publication of the information on grounds of infringement of the principles of the protection of legitimate expectations and equal treatment. Whilst the judgment is an important win for leniency applicants, it will be a disappointment for third parties seeking follow-on damages before national courts and for whom publication of infringement decisions is key to proceedings.
The judgment is also likely to have wider repercussions and impact on the procedure for publishing infringement decisions and on the Commission’s procedure for disclosing confidential information. Indeed, the Court’s judgment opens the way for leniency applicants, as well as any other person having provided confidential information, to object to disclosure and to request the hearing officer to examine an objection to the disclosure of confidential information on any ground ‘arising from rules or principles of EU law’. This means that any principles of EU law can be relied upon to support a claim for the protection of confidential information which the Commission intends to disclose. In particular, this is likely to further delay publication of infringement decisions. The Commission has already been criticized for delay incurred in publishing infringement decisions. Publication of a non-confidential version can take several years due to confidentiality claims made by parties to decisions. The judgment also provides both leniency applicants and other parties to infringement decisions with the opportunity to rely on a wide range of principles of EU law to support a challenge to the disclosure of confidential information. That is not to say that challenges before the hearing officer will be more successful but the number of challenges should increase.
The judgment is also likely to have a knock-on effect on follow-on damage claims before national courts which rely on publication of the Commission’s infringement decisions. It will be interesting to see whether the Court’s ruling will be relied upon in cases relating to the interpretation of Directive 2014/104 on actions for damages, in particular Article 6(6) which exempts leniency corporate statements from disclosure.