On 6 June 2013, the Court of Justice of the European Union ("ECJ") handed down a judgment on a reference for a preliminary ruling from the Austrian Cartel Court on whether a national law which prohibits third party access to documents that have been placed before the Cartel Court, absent the consent of the parties to those competition proceedings, is compatible with EU law (Case C-536/11 – Bundeswettbewerbsbehörde v Donau Chemie AG and others).
In March 2010, the Austrian Cartel Court, in proceedings brought by the Federal Competition Authority based on leniency applications, fined several undertakings for their participation in an illegal cartel on the market for the wholesale distribution of printing chemicals. This decision was confirmed by the Austrian Supreme Court in October 2010. Verband Druck & Medientechnik ("VD&M"), an association representing the interests of undertakings in the printing sector, applied for access to the cartel documents on the grounds that it had a legitimate interest in establishing the nature and importance of the harm suffered by its members as a result of the illegal activities of the cartel, and with a view to preparing a damages action against the cartelists.
Paragraph 39(2) of the 2005 Austrian Federal Law on Cartels and Other Restrictions of Competition ("KartG") however precludes third party access to court files of public law competition proceedings without the consent of the parties to the proceedings. In the case at hand, all parties to the cartel proceedings, with the exception of the Federal Competition Authority, refused consent to access by VD&M. As a consequence, neither the file nor the Austrian Cartel Court ruling could be turned over to VD&M to assist in the pursuit of damages actions against the cartelists, or for any other purpose.
In light of the Pfleiderer judgment (see VBB on Competition Law, Volume 2011, No. 6, available at www.vbb.com), the Austrian Cartel Court questioned whether Austrian law was compatible with the principle of effectiveness and the obligation on Member States to allow individuals to bring actions for damages for breach of competition law. It also expressed doubts on the compatibility of Austrian law with the principle of non-discrimination, when the consent of all parties was not required in ordinary national civil and criminal cases with respect to files held by the courts. The Austrian Cartel Court therefore referred two questions to the ECJ for a preliminary ruling on the compatibility of Austrian law with EU law.
Following Advocate General Jääskinen's opinion (see VBB on Competition Law, Volume 2013, No. 2, available at www.vbb.com), the ECJ considered the question of whether the principle of effectiveness under EU law precludes a national law provision that makes access by third parties to the documents forming part of the file in national proceedings concerning the application of Article 101 TFEU subject to the consent of all the parties to those proceedings, without leaving any possibility for the national courts to weigh up the interests involved.
The ECJ agreed with the Advocate General that EU law precludes such a national law provision. In reaching this conclusion, the ECJ emphasised a number of interesting points, some of which bring welcome clarity to its earlier ruling in the Pfleiderer case.
First, the ECJ noted that the national courts, in exercising their powers for the purpose of applying national rules on the right of access to documents, must weigh up the respective interests in favour of disclosure of the information and in favour of the protection of that information provided voluntarily by a leniency applicant. This is due to the fact that rigid application of such a rule regarding access may undermine the effective application of Article 101 TFEU and the rights that this Article confers on individuals.
As the ECJ held in Pfleiderer, this balancing of interests can be conducted by the national courts only on a case-by-case basis, according to national law, and taking into consideration all the relevant factors of the case.
Paragraph 39(2) KartG provides that access to the competition court file is only granted if none of the parties to the proceedings object. Therefore, national courts ruling on a request for access to the court file are not given the opportunity to weigh up the interests protected by EU law. National courts cannot even intervene so as to protect overriding public interests or the legitimate overriding interests of other parties, including that of allowing disclosure of the requested documents, if just one of those parties objects.
In addition, the parties to the main proceedings can object to allowing access to the file without giving any reasons. In practice, this allows for systematic objections to any request for access, including documents which may contain evidence on which a compensation claim could be based and which the requesting party cannot obtain by any other means.
Further, as the Austrian rule gives the parties to the main proceedings who have infringed Article 101 TFEU the possibility of preventing persons allegedly adversely affected by that infringement from having access to the documents in question, this rule is liable to make those person's right to compensation which is derived from EU law excessively difficult.
At the same time, the ECJ acknowledged that Member States should not be asked to apply the rules on file access in such a way that they would undermine public interests such as the effectiveness of anti-infringement policies in the area of competition law. For example, the effectiveness of leniency programmes could be compromised if documents relating to leniency proceedings were disclosed to third parties wishing to bring an action for damages.
The ECJ noted that such consideration may justify a refusal to grant access to certain documents contained in the file of national competition proceedings. As stated in Pfleiderer, any request for access to the particular documents in question must be assessed on a case-by-case basis, taking into consideration all the relevant factors of the case. It is up to the national court to consider the requesting party's interests in obtaining access to these documents in order to prepare its action for damages, in particular in light of other possibilities the requesting party may have. National courts must also take into account the actual harmful consequences which may result from such access having regard to the legitimate interests of other parties and public interests.
The ECJ remarked that, due to the importance of damages actions which are brought before national courts in ensuring the maintenance of effective competition in the EU, 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 competition authority cannot justify a blanket refusal to grant access to such evidence.
The fact that such a blanket refusal is liable to prevent damages actions from being brought, by giving the undertakings concerned, who may have already benefited from partial immunity from financial penalties, an opportunity to also circumvent their obligation to compensate for the harm resulting from their infringement of Article 101 TFEU, to the detriment of the injured parties, requires that such a refusal is based on overriding reasons relating to the protection of the interest relied on and applicable to each document to which access is denied.
Therefore, the ECJ concluded that the principle of effectiveness under EU law does preclude a national rule such as the Austrian one. It held that where access to documents forming part of the file relating to national proceedings concerning the application of Article 101 TFEU, including access to documents provided under a leniency programme, by third parties is made subject to the consent of all the parties to those proceedings, this prevents the national court from weighing up the interests involved.
Given the positive answer given to the first question, the ECJ considered there was no need to address the second question raised by the Austrian Cartel Court in its reference for a preliminary ruling.
Despite the fact that the ECJ has essentially followed the Pfleiderer judgment by holding that national courts are to decide case-by-case as regards the disclosure of leniency documents, it does not hesitate to tackle the head-on issue of balancing the public interest in the effectiveness of leniency programmes on the one hand and the importance of action for damages before national courts for the maintenance of effective EU competition law on the other. These detailed guidelines were needed after the largely unfinished business in Pfleiderer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
