News Update Competition Litigation

24 September 2020

On 20 July 2020, the European Commission published its 'Communication on the protection of confidential information by national courts in proceedings for the private enforcement of EU competition law' (the "Communication"). The Communication guides the national courts of EU Member States on protecting commercially sensitive information when dealing with disclosure requests.

Directive 2014/104/EU on Antitrust Damages Actions ("Damages Directive") obliges Member States, among other things, to ensure that national courts have the power to order disclosure of evidence in damages claims for EU competition law infringements. This is possible if the claim is plausible, the evidence requested is relevant and the disclosure request is proportionate. At the same time, Member States must ensure that national courts have effective measures at their disposal to protect confidential information in the evidence that is to be disclosed.

Although the Communication is not binding on national courts and does not amend any procedural rules for civil proceedings in the different Member States, it has been welcomed by national courts. This is because effective protective measures are still lacking in the national laws of several Member States.

The Communication specifies that it is up to national courts to decide what constitutes confidential information on a case-by-case basis. Although the Communication does not provide a clear-cut definition of confidential information, it does refer to case law of the EU courts, according to which confidential information is information (i) that is known only to a limited number of persons and (ii) which would cause serious harm to the person who provided it or to third parties if it was disclosed. In addition, the interests that would be harmed by disclosing the information must be, objectively, worthy of protection. The Communication reiterates that the fact that information is confidential is not a bar to disclosure.

Suggested measures

The Communication proposes three concrete measures to protect confidentiality. The appropriate measure or measures in a specific case will depend on the particular circumstances of that case, the relevant national rules and the other factors mentioned in the Communication.

1. Redaction
Documents can be edited by removing the confidential information. The Communication states that disclosing parties must only redact what is strictly necessary. The Communication highlights that national courts may be actively involved in redacting, for example by requesting the disclosing party to substitute the redacted information with a non-confidential summary of the redacted information.

2. Confidentiality rings
The information, including confidential information, can be categorised and exclusively disclosed to defined individuals or categories of individuals: the confidentiality ring. Confidentiality ring members may range from parties' external advisers, including external legal counsel, to in-house legal counsel or other company representatives. Different access rights can be granted to different members, creating an 'inner' and 'outer' ring for commercially sensitive information.

The Communication specifies that national courts may request that members of a confidentiality ring submit written undertakings to further protect confidentiality. The undertakings may include penalties if the members violate their confidentiality obligations.

3. Appointing experts
National courts may also decide to appoint a third-party expert who can exclusively access the confidential information that is to be disclosed. These experts may potentially be asked to sign undertakings that are largely the same as the undertakings that may be imposed on confidentiality ring members.

Protection throughout and following the proceedings

Lastly, the Communication also addresses how confidential information can be used and protected during and following the proceedings after the proposed protective measures have been used. Within that scope the Communication suggests:

• allowing proceedings to be partially or completely held in camera (i.e. holding them in private);
• anonymising information in written judgements that could identify the source of the information or redacting the parts that refer to confidential information, potentially with the parties' assistance;
• restricting access to part of the case file (e.g. refusing access to documents disclosed in a confidentiality ring) or to the entire file.



Possible impact on cartel damages proceedings before the Dutch civil courts

Although the Communication is non-binding, it does provide detailed guidelines for dealing with an extensive range of confidentiality claims. As the Dutch civil courts are less experienced in applying measures such as confidentiality rings or appointing experts to access confidential information, the Communication might help the Dutch civil courts to further develop requests for disclosure and corresponding confidentiality claims in competition damages claims within the parameters of the Dutch Code of Civil Procedure. However, the Communication will still not completely eliminate the tension between protecting confidentiality and the goal of issuing judgments based on information that has been fully available to all involved parties.



Contact

Should you have any questions following this news update, please do not hestitate to contact Albert Knigge or Rick Cornelissen from Houthoff's Competition Litigation team.

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