Two recent cases on transparency & access to documents in EU Institutional procurement (I) (T-136/15)


Two recent General Court judgments have addressed different aspects of transparency duties and access to documents requirements in EU Institutional procurement [for discussion, see A Sanchez-Graells, 'Transparency in Procurement by the EU Institutions' (2017)].

The first Judgment of 14 December 2017 in Evropaïki Dynamiki v Parliament (T-136/15, EU:T:2017:915) concerns access to procurement documents under Regulation 1049/2001. The other Judgment of 14 December 2017, and also involving European Dynamics Luxembourg and Evropaïki Dynamiki v Parliament (T-164/15, EU:T:2017:906, not available in English), addresses issues concerning the duty to provide reasons under the applicable (2012) version of the EU Financial Regulation

This post discusses T-136/15, and a follow-up post will discuss T-164/15.

Access to procurement documents under Regulation 1049/2001--
a blow to the almighty presumed protection of business secrets?

As a starting point, it is worth reminding that the Court of Justice (ECJ) has recognised that the protection of business secrets is a general principle applicable in the context of public procurement [Judgment of 14 February 2008, Varec, C-450/06, EU:C:2008:91, paragraph 49; see also Opinion of AG Kokott of 23 September 2010 in Stichting Natuur en Milieu and Others, C-266/09, EU:C:2010:546, paragraph 77], and that the General Court (GC) has accepted that there is general presumption of confidentiality in respect of the bids submitted by tenderers in a public procurement procedure in the event that a request for access is made by another tenderer, in particular on account of the economic and technical information contained in those bids [Judgment of 29 January 2013, Cosepuri v EFSA, T-339/10 and T-532/10, EU:T:2013:38, paragraphs 95 and 101; and Judgment of 21 September 2016, Secolux v Commission, T-363/14, EU:T:2016:521, paragraphs 47 and 49]. However, in this case, the disappointed bidder (European Dynamics) did not seek access to the tenders submitted by its competitors, but to 'all available information concerning all the requests for quotation which were issued by the [Parliament] for all lots' (T-136/15, para 2). This created an opportunity for the GC to reassess the extent of the presumption against the disclosure of documents containing potential business secrets, as the documents did not originate from the bidders, but rather from the contracting authority. The case does not provide much detail, but it seems that the requests for quotations may have been different between themselves, and that European Dynamics wanted to ascertain whether they represented a proper split of the contract into lots.

With this in mind, and given the width of the general presumption against disclosure of documents on the basis of business secrets, it should come as no surprise that, when European Dynamics asked the European Parliament to provide all requests for quotations--and in addition to other arguments for the rejection of such request, including workload implications, public security, personal data and procedural decision-making issues--the Parliament sought to ground its rejection of access on the fact that 'the documents requested contain information of an economic and technical nature, the presentation of which could reveal the Parliament’s profile as a buyer in the market. In addition, the requests for quotation could contain information on the particular skills of the suppliers selected for each lot as well as details of their commercial strategy and alliances or links with third parties. The protection of commercial interests, namely those of the economic actors involved and of the Parliament, also justified, in the view of the Parliament, refusing all access to the documents requested' (T-136/15, para 16). The Parliament also pressed the additional point that 'the ... exceptions to the right of access... were to be regarded as applying to all ... documents by virtue of a general presumption, in accordance with the line of reasoning developed by the Court of Justice in its judgment of 29 June 2010, Commission v Technische Glaswerke Ilmenau (C‑139/07 P, EU:C:2010:376)' (T-136/15, para 19). Also unsurprisingly, European Dynamics challenged that decision.

In its assessment of this specific aspect of the dispute, the GC found that:

(1) Parliament was generally entitled to rely on presumptions of applicability of the grounds for non-disclosure, as 'the Court of Justice has acknowledged that it is open to the institutions to base their decisions, as regards how granting access might specifically and actually undermine the interest protected by an exception under Article 4 of Regulation No 1049/2001, on general presumptions which apply to certain categories of documents, as considerations of a generally similar kind are likely to apply to requests for disclosure relating to documents of the same nature (judgments of 1 July 2008, Sweden and Turco v Council, C‑39/05 P and C‑52/05 P, EU:C:2008:374, paragraph 50; of 29 June 2010, Commission v Technische Glaswerke Ilmenau, C‑139/07 P, EU:C:2010:376, paragraph 54; of 21 September 2010, Sweden and Others v API and Commission, C‑514/07 P, C‑528/07 P and C‑532/07 P, EU:C:2010:541, paragraph 74, and of 27 February 2014, Commission v EnBW, C‑365/12 P, EU:C:2014:112, paragraph 65)' (T-136/15, para 47, emphasis added). But the possibility of relying on such presumptions required that 'documents of the same category ... contain the same kind of information. ... only if an exception to the right of access manifestly covers the content of those documents in its entirety ... the institution may avoid undertaking a specific, individual examination of those documents (see, to that effect, judgment of 9 September 2011, LPN v Commission, T‑29/08, EU:T:2011:448, paragraph 114)' (T-136/15, para 48). Thus, a detailed assessment of the applicability of the grounds to the specific type of document was necessary.

(2) Reliance on such a presumption was not justified on grounds relating to (i) protection of public security, (ii) privacy or (iii) the protection of Parliament's decision-making process because not all documents covered by the request for access could be presumed to include information relevant to those issues (see T-136/15, paras 50-60). This left the legality Parliament's rejection of access to documentation dependent on the GC's view on the exclusion from disclosure based on the first indent of Article 4(2) Reg 1049/2001, according to which '[t]he institutions shall refuse access to a document where disclosure would undermine the protection of: ... commercial interests of a natural or legal person, including intellectual property'.

(3) When assessing the applicability of a general presumption of exemption in line with the first indent of Art 4(2) Reg 1049/2001, the GC stressed the different nature of documents covered by European Dynamics' request. Its arguments (even if lengthy) require some close analysis:

as regards requests for quotations, a general presumption that commercial interests would be undermined cannot be based ... on the case-law ... relating to the bids of tenderers ...

... in order to attain the objective of the rules on EU public procurement, which is based on undistorted competition, it is important that the contracting authorities do not release information relating to public contract award procedures which could be used to distort competition, whether in an ongoing procurement procedure or in subsequent procedures ...

... it is recognised in the case-law that the economic and technical information in the tenderers’ bids is such as to justify refusal by the institution concerned to grant access to the bid of the successful tenderer. That is the case in particular where such bids contain details of the specific skills of the tenderers and contribute to the individual nature and appeal of the tenderers’ bids ...

 Having regard to the nature and purpose of a request for quotation drawn up by the contracting authority in performance of a framework contract, it cannot be presumed that such a document contains economic and technical information on the contractor or details its specific skill. On the contrary, its request for quotation, which comes from the contracting authority and not from its contractors, includes as a general rule a description of the tasks which the contracting authority wishes to have carried out under the framework contract which it has signed with the contractor. In principle, it is only in response to that request for quotation that the contractor will provide details on the services which it considers it can provide to the contracting authority, the profile of the experts which it can make available and the cost of its services.

Furthermore, the Parliament cannot argue that the disclosure of the requests for quotation will undermine its own interests, in that disclosure could reveal its ‘purchasing profile’ on the market. In fact, even if disclosure of the relationship between the tasks to be performed and the number of working days necessary to complete them could enable the tenderers, in future public procurement procedures, to unveil the Parliament’s costing technique, the fact that tenderers could know the prices quoted in the past for a corresponding service seems more likely to lead to a situation of genuine competition than to a situation where competition would be distorted (sic) ...

... having regard to the nature of a request for quotation drawn up by the contracting authority in performance of a framework agreement and the objective pursued by the [procurement rules], the Parliament was not entitled to rely on a general presumption that the interests protected by the first indent of Article 4(2) of Regulation No 1049/2001 would be undermined to avoid a specific, individual examination of the documents requested.

A request for quotation includes, in principle, a description of the tasks which the contracting authority wishes to have carried out under the framework contract which it has signed with the contracting party, but also more general information concerning, in particular, the practical management and monitoring of projects, the persons responsible, or the format of the reports to be provided on a regular basis. Thus, it is not established that the disclosure of all the information contained in the documents requested would undermine the commercial interests of the Parliament or of third parties.

... the Parliament could not rely on the exception to the right of access set out in the first indent of Article 4(2) of Regulation No 1049/2001 relating to the protection of commercial interests to refuse to carry out a specific, individual examination of the documents requested and to disclose them (T-136/15, paras 63, 68-72, and 74-75, references omitted and emphases added).

Despite excluding the possibility for the Parliament to rely on the presumptions, the GC recognised the validity of the rejection of the request to access the documents on the grounds that complying with it would have generated an excessive workload for the Parliament (see T-136/15, paras 78-103). Therefore, the documents were not disclosed. However, in my view, the approach to the applicability of the presumption of confidentiality to requests for quotations within framework agreements undertaken by the GC in its Evropaïki Dynamiki v Parliament Judgment (T-136/15) is faulty.

Critical comments

Indeed, there are two issues that require particular criticism because, in my view, the GC improperly assessed them.

First,  the GC seems to misinterpret the extent to which a request for quotations within the context of a framework agreement is likely to contain commercially-sensitive information, and errs on the side of presuming excessive neutrality or homogeneity in those requests. In my view, thus, the GC gets it wrong when it considers that '[i]n principle,it is only in response to [a] request for quotation that the contractor will provide details on the services which it considers it can provide to the contracting authority, the profile of the experts which it can make available and the cost of its services' (T-136/15, para 70). This is a reasoning that implicitly establishes the wrong functional equivalence between a call for tenders prior to the award of a public contract (including framework agreements) and a request for quotations within the context of a framework agreement. Given that the award decision (based on the previous tender) would already have established details of the services covered by the concluded framework, the GC gets the general principle backwards in ignoring that each of the requests for quotation would have been different and based on the peculiarities of each contractor's prior offer--otherwise, why would Parliament have issued over 1,000 (different) requests for quotation, and why would European Dynamics be interested in having access to them?

Indeed, given that award of the framework agreement (or, to be more precise, the placing of a contractor in a specific position in the cascade mechanism within the framework, as in the case at hand) results from the previous tender successfully submitted by the interested economic operator--and that, consequently, not all contractors included in the framework agreement would have been included under homogeneous conditions--in my view, the requests for quotations are more likely than not to include details of the previous tender that can be easily 'reverse-engineered' by their competitors. Thus, the protection given by the presumption of confidentiality to the original tender needs to carry through to requests for (more specific) quotations on its basis, so as to avoid such risk of leakage of commercially-relevant information. By taking a different approach, the GC has created a potential negative erosion of the presumption of protection of commercially-sensitive information in the context of EU Institutional procurement where framework agreements are involved. In my view, this is undesirable and the GC's position should be challenged.

Second, the GC's complementary position that 'the fact that tenderers could know the prices quoted in the past for a corresponding service seems more likely to lead to a situation of genuine competition than to a situation where competition would be distorted' (T-136/15, para 71) makes no economic sense, in my opinion. Given that what is presented as information on "past pricing" would, in the case at hand, have concerned "contemporaneous pricing", and that it would be disclosed within such a closed competitive setting as a framework agreement, economic theory predicts anticompetitive effects and a heightened risk of collusion [for discussion, generally, see K-M Halonen, 'Disclosure Rules in EU Public Procurement: Balancing between Competition and Transparency’ (2016) 16(4) Journal of Public Procurement 528; A Sanchez-Graells, ‘The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives’ (2013) Univ. of Leicester School of Law Research Paper No. 13-11]. By failing to take that risk into account, and starting to consolidate a jurisprudential position that revelation of past pricing information is pro-competitive, the GC is following the wrong functional approach. This, too, I would like to see challenged and changed.

Can you ask for what you already have? GC tightens access to documents of EU institutions (T-221/08)

©European Commission.

©European Commission.

In its Judgment of 26 April 2016 in case Strack v Commission, T-221/08, EU:T:2016:242 (not available in English, not even the official extracts) the General Court (GC) of the Court of Justice of the European Union decided some interesting practical issues related to the rules on access access to European Parliament, Council and Commission documents under Regulation 1049/2001. The point I consider most interesting is whether documents to which the claimant has had previous access by means other than the rights provided by Reg 1049/2001 can be excluded from an access request. Or, in other words, whether Reg 1049/2001 allows you to ask for what you already have.

This point is important because different "access routes" to the documents imply different uses for those documents, particularly if the applicant intends to reveal them to third parties or to the general public. As the applicant in the case submitted to the court,

Only a transmission on the basis of [Reg 1049/2001] would make the document automatically available to third parties and would enable the applicant to achieve his goal, that is, to provide the public, in a fully legally-compliant form, with information on how his complaint was handled by OLAF (T-221/08, para 124, own translation from French).

In the case at hand, the applicant required access to voluminous documentation held by OLAF. Among those documents were correspondence between OLAF and the applicant and OLAF and a mediator, which had previously been disclosed to the applicant (in the course of that correspondence or in relation to mediation efforts). OLAF excluded those documents from the request for access on the basis that they were previously disclosed (PD documents). The applicant challenged this exclusion from his request.

Interestingly, the GC deals with this issue in a rather comprehensive manner and determines that

128 The purpose of Regulation 1049/2001 is to ensure that documents of the institutions are accessible to the general public ... and ... a document disclosed under that regulation document enters the public domain.

129 This result is also reflected in Article 9, paragraph 2, point e) of the annex to the Rules of Procedure of the Commission on the provisions relating to the application of Regulation 1049/2001 ... under which documents already disclosed in response to a previous [Reg 1049/2001] request will be "automatically" provided on [further] request.

130 It is true that ... in the case Miettinen v Council (T-303/13, EU:T:2014:48, paragraphs 17 to 19) the Court stated that, since the applicant was granted access to the requested document, it had obtained the only result that its action could provide. However, contrary to what happens in this case, in the Miettinen v Council case ... the requested document had been released to the public, so it can not be inferred from that decision that the mere fact that the person concerned had had access to the document requested for any reason would prevent her, in every case, to request access to the same document on the basis of Regulation no 1049/2001, when such document has not been disclosed to the public.

131 It is therefore apparent that the first decision of OLAF, insofar as it refused the applicant access to [PD documents] on the basis of Regulation no 1049/2001, prevents those documents being considered public, which is precisely what the applicant claims and which corresponds to the objective pursued by Regulation 1049/2001, which is to grant the widest possible access to documents with a view to greater openness, to ensure greater participation of citizens in the process of decision making, and greater legitimacy, effectiveness and accountability of government to citizens in a democratic system ...

132 Consequently, the fact that the applicant already had the documents concerned by his request for access and that the objective of the latter was not, therefore, to give him access to their content but rather to disclose them to third parties is indifferent, especially because the reasons for applicant's decision to submit such a request are irrelevant, since Regulation 1049/2001 does not require that the person concerned motivates her request for access to documents, and the reasons for such a request cannot have any impact on its admission or refusal ... (T-221/08, paras 128 to 132, references omitted, own translation from Spanish and emphasis added).

This is quite an important clarification because, in my view, it will force European Institutions to tighten their procedures under Reg 1049/2001 and always assess access to documents requests on their merits. Importantly as well, the Judgment comes to clarify in very strong terms that documents disclosed under Reg 1049/2001 enter the public domain and, consequently, there can be no restrictions on their further use by the applicant or any third parties.

In the area of public procurement, this means that the European Institutions, when they act as contracting authorities, need to be particularly careful in the way they assess requests that concern documents which can impact on the commercial interests of economic operators, including intellectual property, which once made available will become part of the public domain--and may need to start (re)considering ways in which to ensure appropriate protection of business secrets along the lines of the standards created by the new Directive on trade secrets, even if it will not be directly applicable. Once again, this is linked to the issue of the level of transparency in public procurement and the need to seek a difficult balance between transparency and competition in procurement processes, and a more market-oriented approach such as that emerging in the UK may be a good example to take into consideration.