Access to documents under Reg 1049/2001 and private enforcement of EU competition law – the CDC Hydrogene Peroxide judgment

Christopher Brown

As usual, the EU Courts handed down judgment in a number of cases shortly before Christmas. EUtopia law will be posting blogs on one or two of them in the days and weeks to come, including the important judgment in NS. To kick off, I thought I would draw our readers’ attention to the judgment of the GC in Case T-437/08 CDC Hydrogene Peroxide.  It is particularly important for those of us who practise in the field of competition law, but it will also be of general interest to those interested in the EU access to information regime.

CDC Hydrogene Peroxide (CDC) is a Belgian company specifically set up for the purpose of recovering damages on behalf of those who have suffered loss as a result of the Hydrogene Peroxide cartel.  That cartel was uncovered by the Commission, which in 2006 imposed large fines on the perpetrators.  In 2008, CDC sought access to the full version of the statement of contents of the Commission’s case file.  It relied on Arts 2(1) and 11(1) and (2) of Regulation 1049/2001, the legislation regulating access to documents held by EU institutions. Despite the very focussed nature of the request, the Commission refused to grant access, citing first the commercial interests of the undertakings party to the cartel and, secondly, the need to protect the purpose of its investigations, both of which are recognised, in principle, as valid exceptions to the general duty to provide access.  The Commission did, however, provide a non-confidential version of the document.

As to the first reason for refusing full access, the Commission contended that some information, taken together with other information in the non-confidential version of the infringement decision, could lead victims of the cartel to consider that certain documents listed in the statement of contents might contain incriminating evidence, leading in turn to a damages action.  The GC was unimpressed at this argument. After noting that the exceptions to the general principle of the widest possible access to documents must be narrowly construed, the Court held, in effect, that the expression “protection of commercial interests” could not be given the open-ended meaning attributed to it by the Commission, which had focused on the fact that the statement of contents might set in motion a ‘train of enquiry’, leading the applicant to request other documents, perhaps directly of the cartelists themselves in the context of litigation.  The fact that disclosure of the statement might make litigation by victims more likely was not a good enough reason to refuse the request:

         “49. …even if the fact that actions for damages were brought against a company could undoubtedly cause high costs to be incurred, even if only in terms of legal costs, and even if the actions were subsequently dismissed as unfounded, the fact remains that the interest of a company which took part in a cartel in avoiding such actions cannot be regarded as a commercial interest and, in any event, does not constitute an interest deserving of protection, having regard, in particular, to the fact that any individual has the right to claim damages for loss caused to him by conduct which is liable to restrict or distort competition (Case C‑453/99 Courage and Crehan [2001] ECR I‑6297, paragraphs 24 and 26, and Joined Cases C‑295/04 to C‑298/04 Manfredi and Others [2006] ECR I‑6619, paragraphs 59 and 61).”

The GC was hardly more sympathetic towards the Commission’s second argument.  It pointed out that Commission’s investigation had long been completed, even if appeal proceedings were still underway, and so there was no question of disclosure jeopardising the investigation into that particular cartel.  Importantly, it specifically rejected the Commission’s wider argument that the exception in Reg 1049 relating to the protection of the purpose of its investigations was independent of any specific case and allowed the Commission to refuse access by reference to a possible wider impact on its leniency programme: such an interpretation

            “70. …would amount to permitting the [Commission] to avoid the application of Regulation No 1049/2001, without any limit in time, to any document in a competition case merely by reference to a possible future adverse impact on its leniency programme…

72. It must be held that such a broad interpretation of the concept of investigation activities is incompatible with the principle that, by reason of the purpose of Article 1049/2001, set out in recital 4, namely, ‘to give the fullest possible effect to the right of public access to documents’, the exceptions laid down in Article 4 of that regulation must be interpreted and applied strictly (see the case-law cited in paragraph 36 above).

73. It must be stressed, in that regard, that nothing in Regulation No 1049/2001 leads to the supposition that EU competition policy should enjoy, in the application of that regulation, treatment different from other EU policies. There is thus no reason to interpret the concept of the ‘purpose of the investigation activities’ differently in the context of competition policy than in other EU policies.”

The GC further pointed out (at para 77) that:

“the leniency and co-operation programmes whose effectiveness the Commission is seeking to protect are not the only means of ensuring compliance with EU competition law. Actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the EU (Courage and Crehan, paragraph 49 above, paragraph 27).”

The GC therefore upheld the appeal.

This is undoubtedly an important judgment on the scope of the Commission’s duties under Reg 1049.  The Commission is understandably sensitive towards requests for access to documents: it is concerned that cartelists will be less likely to ‘blow the whistle’ on cartels by approaching the Commission with applications for immunity from fines or lenient treatment if they fear subsequent disclosure of documents by the Commission to third parties who may wish to bring claims against them.  That has led the Commission to take a hard-line stance on applications for disclosure by victims of anti-competitive conduct.  But as the Court points out, there is also (as the Commission itself recognises) a public interest in facilitating damages actions by victims: they act as ‘private prosecutors’ of the competition rules, helping to re-enforce the deterrent effect of the law.

The judgment is also consistent with the stance taken by the CJEU last June in Case C-360/09 Pfleiderer. There, the Court held that EU law did not prohibit access by victims to leniency documents held by national competition authorities investigating breaches of Articles 101 and 102 TFEU; instead, a case by case analysis was called for (para 31). (See also the judgment of Roth J in National Grid Electricity Transmission v ABB [2011] EWHC 1717 (Ch) at para 36 for comment on the scope of Pfleiderer.)

The big question, however, is this: will such judgments have a chilling effect on cartelists’ incentives to call time on cartels, thus making it harder for the Commission and other competition agencies to combat such phenomena? Time will tell, but there are good grounds for considering that such fears may be exaggerated. First, the ever increasing size of penalties imposed around the world, including by the Commission, the inherently unstable nature of cartels and the drive towards good corporate governance ought all to encourage cartelists to seek immunity from fines if possible. Secondly, the fact remains that in various jurisdictions there may be ways to gain access to documents held by the Commission indirectly, by seeking them from the parties who submitted them to the Commission in the first place as part of the disclosure process in the context of ongoing litigation: it will be a fairly rare case in which access to documents on the agency’s file is needed in order to establish whether grounds for an action exist at all.  In other words, subsequent litigation on the part of victims is one of the real risks cartelists run; and there is a good argument that such risk is not materially diminished by a hard-line stance on disclosure, particularly of fringe documents such as that in issue here.

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