When an undertaking is the target of an investigation into anti-competitive practices, the right of access to the file and the protection of confidential information to ensure a fair procedure is a balance that can be difficult to maintain. Confidentiality rings are one of the tools in competition law that try to reconcile these different interests. These procedural tools allow parties to access documents essential for mounting their defence, while ensuring that the confidentiality of sensitive business data is preserved. However, their effectiveness can be affected by the many challenges encountered in their implementation.
Described as a “negotiated disclosure procedure” in paragraph 96 of the Antitrust Best Practices, the confidentiality rings consist of a form of restricted disclosure of the file. Under this procedure, a party negotiates with an information provider from the Commission in order to receive the information contained in the file on its behalf through a small circle of individuals, whose composition is decided by negotiation on a case-by-case basis. They can thus be used both as screening mechanisms, allowing the identification of specific documents of particular interest to the addressee of a Statement of Objections, as well as a means of limiting access to documents which are at the same time confidential and useful for the addressee of the statement of objections.
Although confidentiality rings in theory offer a pragmatic solution by allowing unrestricted access to the file while preserving the confidentiality of sensitive business information, their effectiveness and fairness have nevertheless been regularly challenged.
Confidentiality rings have played a crucial role in a number of cases, including Ethanol Benchmarks, in which sensitive documents provided by certain parties contained self-incriminating evidence. The Commission faced the challenge of providing access to the file while ensuring that the evidence was not disclosed to parties not involved in the settlement discussions. The Court then confirmed that written communications made during settlement discussions could not benefit from a presumption of confidentiality despite the self-incriminating statements they contained.[1]Access to confidentiality rings is only granted subject to the conditions set out in paragraph 35 of the Settlement Notice, and the interests of the party to the settlement were sufficiently protected in this situation.
Similarly, in JPMorgan Chase and Others v Commission, the General Court reaffirmed the need for confidentiality rings in safeguarding both the right to a fair trial and the integrity of sensitive business information.[2]Nevertheless, both the General Court and the Court of Justice on appeal rejected allegations that publication of the non-confidential version of the Commission’s decision would undermine the presumption of innocence and the reputation of the individuals involved in the case.[3] Confidentiality is not an absolute right, and interim measures such as those requested by the parties must also meet strict conditions.
Although confidentiality rings are crucial for ensuring the confidentiality of sensitive business information, is there not too much of a risk that the balance will tip in favour of confidentiality, to the detriment of procedural fairness? Several shortcomings can be identified:
- Restricted access to evidence: given that only a limited group – usually economic experts, legal representatives or an external lawyer – is granted access to key documents, the ability of the parties to ensure a fair defence is at risk of being compromised. After establishing in Courage v Crehan that individuals must be able to claim damages for harm caused by anti-competitive conduct,[4] the Court of Justice clarified in cases such as Donau Chemie and Pfleiderer, in the context of damages actions, that access to evidence is essential for the effective exercise of those rights. The Court ruled that a systematic refusal to grant access to evidence could undermine the effectiveness of European competition law and that national courts must balance the need for disclosure with the protection of confidential information.[5] In order to guarantee the exercise of the right to full compensation, shouldn’t the relevant evidence be disclosed in full?
- Procedural delays: negotiating the extent of the information to be disclosed and the confidential treatment of the data can be time-consuming, potentially slowing down the proceedings and harming the parties’ ability to defend themselves.
- Burdens: although confidentiality rings are essential to protect sensitive business information, they also impose strict obligations on the parties involved, putting their own liability at stake for breaches.
In short, confidentiality rings are a vital tool for ensuring the delicate balance between the right of access to the file and the protection of sensitive business data. Nevertheless, as the case law of the Court of Justice reminds us, the right of access to the file remains fundamental to guarantee the parties involved a fair defence. If the procedure surrounding confidentiality rings is too restrictive, it risks compromising the very fairness it is intended to protect and, in so doing, becoming an obstacle to justice. Their application must accordingly be closely monitored in order to guarantee both procedural fairness and the right to a full defence.
[1] Order of 10 September 2019, Lantmännen and Lantmännen Agroetanol v Commission, C–318/19 P(R), EU:C:2019:698, para. 52.
[2] Order of 25 October 2018, JPMorgan Chase and Others v Commission, T-420/18 R, EU:T:2018:724, para. 38.
[3] Order of 21 March 2019, JPMorgan Chase and Others v Commission, C‑1/19 P(R), EU:C:2019:230, paras. 32-35.
[4] Judgment of 20 September 2001, Courage and Crehan, C-453/99, EU:C:2001:465, para. 26.
[5] Judgments of 6 June 2013, Donau Chemie e.a., C‑536/11, EU:C:2013:366, paras. 30-32, and of 14 June 2011, Pfleiderer, C-360/09, EU:C:2011:389, paras. 30-31.
Co(E)mpetition Procedure 