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.


(Non)disclosure of leniency applications in the proposed 'Damages Directive': Commission v CJEU?

The European Commission has finally published its Proposal for a Directive of the European Parliament and of the Council 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 [COM(2013) 404] (the proposed 'Damages Directive'). 

Amongst many other interesting (and controversial rules), the proposed Damages Directive tackles the issue of the disclosability of leniency materials, which has been recently analysed by the Court of Justice of the European Union (CJEU) in Donau Chemie and had been previously analysed in Pfleiderer (which were discussed here).

The proposed 'Damages Directive' follows the prior Resolution of the Meeting of the Heads of the European Competition Authorities of 23 May 2012, on the protection of leniency material in the context of civil damages actions and is based on the argument that
In the absence of legally binding action at the EU level, the effectiveness of the leniency programmes — which constitute a very important instrument in the public enforcement of the EU competition rules — could thus be seriously undermined by the risk of disclosure of certain documents in damages actions before national courts.
Remarkably, this argument was adopted by Advocate General Jääskinen in his Donau Chemie Opinion (para 56), but was later rejected in very clear terms by the CJEU in the Donau Chemie Judgment, where it very clearly emphasised that:
as regards the public interest of having effective leniency programmes [...] it should be observed that, given the importance of actions for damages brought before national courts in ensuring the maintenance of effective competition in the European Union (see C‑453/99 Courage and Crehan [2001] ECR I‑6297, paragraph 27), the argument that there is a risk that access to evidence contained in a file in competition proceedings which is necessary as a basis for those actions may undermine the effectiveness of a leniency programme in which those documents were disclosed to the competent competition authority cannot justify a refusal to grant access to that evidence (C-536/11 at para 46, emphasis added).
Consequently,  the CJEU restricted the possibility to reject the disclosure of leniency documents to very specific and narrow circumstances by stressing that
The mere risk that a given document may actually undermine the public interest relating to the effectiveness of the national leniency programme is liable to justify the non-disclosure of that document (C-536/11 at paras 48, emphasis added).
This is in clear contrast with the Commission's policy-based approach in the proposed 'Damages Directive', where specific rules against the disclosure of leniency documents are established in Article 6 on the limits on the disclosure of evidence from the file of a competition authority:
1. Member States shall ensure that, for the purpose of actions for damages, national courts cannot at any time order a party or a third party to disclose any of the following categories of evidence:
(a) leniency corporate statements; and
(b) settlement submissions.
2. Member States shall ensure that, for the purpose of actions for damages, national courts can order the disclosure of the following categories of evidence only after a competition authority has closed its proceedings or taken a decision referred to in Article 5 of Regulation No 1/2003 or in Chapter III of Regulation No 1/2003:
(a) information that was prepared by a natural or legal person specifically for the proceedings of a competition authority;
(b) information that was drawn up by a competition authority in the course of its proceedings.
3. Disclosure of evidence in the file of a competition authority that does not fall into any of the categories listed in paragraphs 1 or 2 of this Article may be ordered in actions for damages at any time.
As the explanatory memorandum clarifies, the rules have the following aims:
To prevent that the disclosure of evidence jeopardises the public enforcement of the competition rules by a competition authority, the proposed Directive also establishes common EU-wide limits to disclosure of evidence held in the file of a competition authority:
(a) First, it provides for absolute protection for two types of documents which are considered to be crucial for the effectiveness of public enforcement tools. The documents referred to are the leniency corporate statements and settlement submissions. The disclosure of these documents risks seriously affecting the effectiveness of the leniency programme and of settlements procedures. Under the proposed Directive, a national court can never order disclosure of such documents in an action for damages.
(b) Second, it provides for temporary protection for documents that the parties have specifically prepared for the purpose of public enforcement proceedings (e.g. the party’s replies to the authority’s request for information) or that the competition authority has drawn up in the course of its proceedings (e.g. a statement of objections). Those documents can be disclosed for the purpose of an antitrust damages action only after the competition authority has closed its proceedings.
(c) Apart from limiting the national court’s ability to order disclosure, the above protective measures should also come into play if and when the protected documents have been obtained in the context of public enforcement proceedings (e.g. in the exercise of one of the parties’ right of defence). Therefore, where one of the parties in the action for damages had obtained those documents from the file of a competition authority, such documents are not admissible as evidence in an action for damages (documents of category (a) above) or are admissible only when the authority has closed its proceedings (documents of category (b) above).
(d) Documents which fall outside the above categories can be disclosed by court order at any moment in time. However, when doing so, national courts should refrain from ordering the disclosure of evidence by reference to information supplied to a competition authority for the purpose of its proceedings. While the investigation is on-going, such disclosure could hinder public enforcement proceedings, since it would reveal what information is in the file of a competition authority and could thus be used to unravel the authority’s investigation strategy. However, the selection of pre-existing documents that are submitted to a competition authority for the purposes of the proceedings is in itself relevant, as undertakings are invited to supply targeted evidence in view of their cooperation. The willingness of undertakings to supply such evidence exhaustively or selectively when cooperating with competition authorities may be hindered by disclosure requests that identify a category of documents by reference to their presence in the file of a competition authority rather than their type, nature or object (e.g. requests for all documents in the file of a competition authority or all documents submitted thereto by a party). Therefore, such global disclosure requests for documents should normally be deemed by the court as disproportionate and not complying with the requesting party's duty to specify categories of evidence as precisely and narrowly as possible.
(e) Finally, to prevent documents obtained through access to a competition authority’s file becoming an object of trade, only the person who obtained access to the file (or his legal successor in the rights related to the claim) should be able to use those documents as evidence in an action for damages.
In my view, the rules that support points (a) to (d) are in contrast with the Donau Chemie Judgment and are bound to clash with existing EU Law in two respects: firstly, they can be disproportionately limiting the possibilities to obtain effective redress and, consequently, limiting the effectiveness of Articles 101 and 102 TFEU as interpreted by the CJEU in Courage. And, secondly, they can be disproportionately restricting the procedural autonomy of Member States by excluding the ability of domestic courts to conduct the balancing of interests between leniency defendants and damages claimants that the CJEU has stressed both in Pfleiderer and Donau Chemie

Hence, in my opinion, the rules in the Commission's proposed 'Damages Directive' are inadequate and should be revised, particularly as the absolute protection of  leniency corporate statements and settlement submissions are concerned, which are based on a policy option that has been disapproved by the CJEU very recently. 

The rest of the rules on temporary protection of evidence and preemption of discovery-like requests of evidence should also be revised, since they may make it very burdensome for potential claimants to actually have access to the requested evidence (for alternative proposals discussed in view of the 2005 Green Paper on Damages, see Sanchez Graells, 'Discovery, Confidentiality and Disclosure of Evidence Under the Private Enforcement of EU Antitrust Rules'). Otherwise, there will be very significant difficulties for the claim of damages in private actions due to infringements of the EU's and Member States' competition rules.

Again on the protection of confidentiality in procurement evaluation: A step forward? (T-339/10 and T-532/10)

In its Judgment of 29 January 2013 in Joined Cases T‑339/10 and T‑532/10 Cosepuri Soc. Coop. pA v European Food Safety Authority (EFSA), the General Court has ruled again on the topical issue of the protection of confidentiality and business secrets in tender evaluation--and, in principle, has shown a more balanced approach than in previous Judgments concerned with transparency at debriefing stage

However, in my opinion, the case law in this area still falls short from guaranteeing a proper balance between transparency and protection of business secrets and continues to promote excessive disclosure.

In the case at hand, Cosepuri challenged the EFSA's evaluation procedure on the basis of the confidential treatment of financial assessment. The GC has taken no issue with the degree of confidentiality imposed by EFSA, but on a series of grounds that still seem (partially) inadequate:

32 First, the applicant calls into question the fact that Part II.8.2 of the tender specifications provided that the tender evaluation procedure was to be confidential. It should be noted in that regard that the applicant has the right to challenge, as an incidental plea, the lawfulness of the specifications in the present action (see, to that effect, Case T495/04 Belfass v Council [2008] ECR II781, paragraph 44). […]
33 Article 89(1) of the Financial Regulation provides that all public contracts financed in whole or in part by the budget are to comply, inter alia, with the principle of transparency. In the present case, it must be noted that Part II.8.2 of the specifications, which provides that the procedure for the evaluation of the tenders is to be conducted in secret, satisfies the requirement of preserving the confidentiality of the tenders and the need to avoid, in principle, contact between the contracting authority and the tenderers (see, on this point, Article 99 of the Financial Regulation and Article 148 of the Implementing Rules). The principle of transparency, referred to in Article 89(1) of the Financial Regulation, which is invoked by the applicant, must be reconciled with those requirements. Accordingly, there is no basis on which it can be concluded that Part II.8 of the specifications is vitiated by unlawfulness.
34 Second, the applicant challenges the fact that it was not able to ascertain the price proposed by the successful tenderer. In particular, the applicant states that EFSA ensured that it would not be possible for any subsequent verification to be carried out by redacting from the evaluation report the price offered by the successful tenderer. In that regard, without there being any need to rule in the present case on whether the price proposed by the successful tenderer formed part of the information which the contracting authority should have communicated to the unsuccessful tenderers (sic), it is clear from the evidence submitted that the applicant was in a position to ascertain the price in questionIt is apparent from Section 2.4 of the evaluation committee report that the applicant and the successful tenderer offered the same price in respect of points 2 to 7 of the financial bid, both obtaining the maximum score of 15 points. The price offered by the successful tenderer in respect of points 2 to 7 of the financial bid is therefore abundantly clear from the evaluation committee report. Moreover, with regard to point 1 of the financial bid, the evaluation committee report indicated the price offered by the applicant and the mark obtained. Although it does not expressly refer to the price offered by the successful tenderer, that report specifies the mark obtained by it. Taking account of those factors, it was possible to calculate, without any difficulty, the price proposed by the successful tenderer in respect of point 1 of the financial bid, as submitted by EFSA in connection with the second plea. Furthermore, the Court has been able to verify, by way of the measure of inquiry adopted at the hearing (see paragraph 16 above), that the price mentioned by EFSA in its written pleadings was in fact the price proposed by the successful tenderer. In view of all the foregoing considerations, the Court considers that, even if EFSA had erred by failing to indicate expressly to the applicant the price proposed by the successful tenderer, such an error would have had no effect on the lawfulness of EFSA’s decision to reject the applicant’s tender and award the contract at issue to another tenderer whose bid was considered to be better, since the applicant was in a position to ascertain that price. The applicant’s arguments in that regard must therefore be rejected.
35 Third, with regard to the principle of sound administration relied on by the applicant, according to caselaw, guarantees afforded by the European Union legal order in administrative proceedings include, in particular, the principle of sound administration, which entails the duty on the part of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see the judgment of 15 September 2011 in Case T407/07 CMB and Christof v Commission, not published in the ECR, paragraph 182 and the caselaw cited). In the present case, the arguments put forward by the applicant in the first plea, which essentially consist in criticising the fact that it was not granted access to the financial bid of the successful tenderer, do not demonstrate that EFSA failed to examine carefully and impartially all the relevant aspects of the case. In the absence of more detailed evidence, the applicant’s arguments in that regard must be rejected. (T-339/10 and 532/10 at paras. 32 to 35, emphasis added).

In my view, paragraphs 33 and 35 of the Cosepuri Judgment must be welcome, as they set a more balanced framework for the assessment of the obligation to disclose confidential information and business secrets under the principles of transparency and good administration.

On the contrary, paragraph 34 deserves a clear rejection, given that the GC keeps a very formalistic approach to the protection of confidential information and takes no issue with the fact that such sensitive information as price can be disclosed indirectly, and considers that that does not infringe either the rights of the 'disclosed' undertaking to protection of its business secrets, nor the procedural rights of the disappointed bidder that is granted indirect access to that information.

I think that the GC should have taken a stronger position and clearly confirmed that both direct and indirect disclosure of price elements and financial evaluations can be restricted or excluded on grounds of protection of confidentiality. Otherwise, the incentives continue to push contracting authorities for an excessive degree of transparency in public procurement settings--which creates significant risks of collusion [Sánchez Graells, "Public Procurement and Competition: Some Challenges Arising from Recent Developments in EU Public Procurement Law" in Bovis (ed) Research Handbook on European Public Procurement  (forthcoming),]. 

GC on non-disclosure of ECB documents: Carte blanche to public market manipulation? (T-590/10)

Today's Judgment of the General Court of the EU in case T-590/10 Gabi Thesing and Bloomberg Finance LP v ECB has provided clarification on the reasons that the ECB (and, by analogy, other EU Institutions) can provide to reject a request of access to its documents. The GC has backed the ECB in its non-disclosure decision on the basis of the protection of public interest and has adopted a broad view of such an exception. 

In general terms, the position of the ECB and the GC seem appropriate to grant  sufficient administrative discretion to the EU Institutions in their assessment of the public interest at stake. However, the specifics of the GC Judgment are a bit troubling, if one takes the position of the GC to its logical extreme. In my view, the following bears emphasizing:
43 [...] the ECB must be recognised as enjoying a wide discretion for the purpose of determining whether the disclosure of documents relating to the fields covered by that exception could undermine the public interest. The European Union judicature’s review of the legality of such a decision must therefore be limited to verifying whether the procedural rules and the duty to state reasons have been complied with, whether the facts have been accurately stated, and whether there has been a manifest error of assessment or a misuse of powers (see, by analogy, Case C‑266/05 P Sison v Council [2007] ECR I‑1233, paragraph 34). [...]
45 [...] with respect to the applicants’ arguments that the ECB incorrectly failed to take account of the public interest considerations in favour of disclosure and that there is a compelling public interest for disclosure of the documents at issue which would in fact further the public interest, the Court notes that the exceptions to the right of access to documents provided for in Article 4(1)(a) of Decision 2004/258 are framed in mandatory terms. It follows that the ECB is obliged to refuse access to documents falling under any one of those exceptions once the relevant circumstances are shown to exist, and no weighing up of an ‘overriding public interest’ is provided for in that provision, in contrast with the exceptions referred to in Article 4(2) and (3) of that decision (see, by analogy, Joined Cases T‑3/00 and T‑337/04 Pitsiorlas v Council and ECB [2007] ECR II‑4779, paragraph 227 and the case-law cited). [...]
51 As regards the issue whether disclosure of the first document would specifically and effectively undermine the protected interest in question, it is common ground [...] that, at the time of the adoption of the contested decision, the European financial markets were in a very vulnerable environment. The stability of those markets was fragile, in particular, because of the economic and financial situation of the Hellenic Republic. It is also common ground that that situation and the related sales of Greek financial assets were causing strong depreciations in the value of those assets, which also triggered losses for Greek and other European holders. The applicants did not dispute that that development had the potential of leading to negative spillover effects on the solvency and funding conditions of other issuers and countries in the euro area. In such an environment, it is clear that market participants use the information disclosed by central banks and that their analyses and decisions are considered a particularly important and reliable source to assess current and prospective financial market developments. Moreover, the ECB was entitled to find that public confidence is an essential element affecting the proper functioning of the financial markets. The ECB was not indeed contradicted in this respect by the applicants. [...]
56 [...] the fact that, on 21 October 2010, the data contained in the first document were outdated and that they gave only a snapshot of the factual situation at the time that the document was drafted does not permit the conclusion that, in the event of disclosure of that document, financial market participants would also have regarded as outdated and therefore of no value ECB staff assumptions and views regarding the impact of off-market swaps on government deficit and on government debt which are contained in that document.
57 Although it is true that those participants are professionals who can be expected to use information taken from documents in the context of their work, the fact remains that they consider assumptions and views originating from the ECB to be particularly important and reliable for assessing the financial market. It cannot reasonably be precluded that, even if those assumptions and views were made on the basis of data available well before 21 October 2010, they would have been regarded as still valid on that date. Moreover, it can be assumed that, by relying on those assumptions and views that were based on a certain known factual situation, those professionals might have inferred, on the basis of additional data, assumptions and views allegedly held by the ECB regarding the government deficit and government debt at the time that the ECB definitively refused access to that document. In this respect, any clarification by the ECB on the disclosed version of that document, indicating that the information contained therein was no longer up to date, would not have been able to prevent disclosure of that document from misleading the public and financial market participants in particular on the situation regarding the government deficit and government debt as assessed by the ECB.
58 In the light of the very vulnerable environment in which the financial markets found themselves at the time of adoption of the contested decision, the assessment that such an error would undermine the economic policy of the Union and the Hellenic Republic cannot be rejected as manifestly incorrect. Indeed, such an error might have had negative consequences on access, in particular for that Member State, to the financial markets and might therefore have affected the effective conduct of economic policy in the Hellenic Republic and the Union. (T-590/10, paras 43 to 58, emphasis added).
In my view, to put it clearly, the reasoning of the GC diminishes the analytical capacity of the financial sector and disregards the ability of professional financial advisors and analysts to separate the chaff from the grain and boldly assumes that panic and shortsightedness would have dominated the analysis of the documents which disclosure was requested (a rather strong assumption, at any rate). Moreover, in its analysis of the cumulative impact that disclosure may have had, the GC basically opposes all basic tenets that financial markets can only work effectively on the basis of full disclosure of any potentially relevant information [an assumption that, on the other hand, is strongly defended under EU rules on market abuse]. 

All in all, in an (acknowledged) extreme reading of the GC's Thesing Judgment, the ECB (and other EU Institutions) may have been given carte blanche to manipulate financial markets (by withholding information) if they deem such manipulation in the public interest. That can surely not be acceptable under EU Law. Therefore, a correction of the Thesing broad reasoning seems desirable, in order to keep any degree of effectiveness in the provisions of article 15 TFEU -- and so that everything is not effectively lost in the field of EU governance.