European Union: General Court Confirms Inaccessibility Of Inability To Pay Requests

Last Updated: 17 April 2014
Article by Van Bael Bellis

On 24 March 2014, the General Court of the European Union ("GC") delivered its judgment on an appeal by Reagens SpA ("Reagens"), seeking the annulment of a European Commission decision refusing access to file documents in the heat stabilisers cartel case.

In November 2009, the Commission had fined 24 companies, a total of EUR 173,864,000 for breaching Article 101 TFEU due to their involvement in two illegal cartels in relation to plastic additives used as heat stabilisers. Reagens was fined EUR 10,791,000 for its participation in the cartel.

During the administrative procedure which preceded the adoption of the cartel decision, Reagens and two other companies had requested that their inability to pay be taken into account in setting the fine. The requests of Reagens and of one other company were denied.

Reagens brought an action before the GC, seeking the annulment of the Commission's rejection decision. Reagens sought access to documents relating to inability to pay requests made by the other participants in the cartel. The Commission refused to disclose these documents, relying on Regulation 1049/2001 which sets out the conditions under which EU institutions must provide access to documents. Article 4(2) of this Regulation provides that an institution can refuse access to a document where disclosure would undermine the protection of commercial interests, court proceedings, inspections, investigations and audits unless there is an overriding public interest in disclosure to third parties.

According to the GC, the Commission had erred in its finding that non-confidential versions of the undertakings' initial inability to pay requests and the Commission's standard first questionnaire were covered by the exception from disclosure relating to the protection of commercial information and the protection of the purpose of Commission investigations. These documents should, therefore, have been disclosed.

On the other hand, the Commission was entitled to decide that the undertakings' responses to the first questionnaire, the second targeted and specific questionnaires sent by the Commission, and the undertakings' replies to those questionnaires were protected from disclosure as these documents contained confidential information about the undertakings' financial position.

The GC rejected Reagens' claim that the Commission did not carry out the required concrete, individual examination of the requested documents to determine whether the exceptions in Article 4(2) applied. The Court did note, however, that to justify a decision to refuse access to a requested document, the Commission must explain how access to that document could specifically and actually undermine the interest protected by the exception.

The GC did not consider that the risk that the undertakings' creditors might withdraw could arise from the mere fact that the undertaking requested that its ability to pay be taken into account. Such a risk exists as soon as the creditors of the undertakings become aware of an investigation which is liable to result in heavy penalties. The Commission could not, therefore, refuse access to the undertakings' requests for the purpose of protecting their commercial interests.

The Commission claimed that Reagens' interest in disclosure was of a private nature and that there were no elements showing the existence of an overriding public interest.

The GC noted that the interest of the public in obtaining access to a document pursuant to the principle of transparency, does not, in general, carry the same weight where the document relates to an administrative procedure intended to apply the competition rules as compared to a situation where the document relates to a procedure in which the institution acts in its capacity as legislator.

Further, the purpose of better preparing an action against a decision does not, as such, constitute an overriding public interest in disclosure prevailing over the protection of confidentiality. Therefore it was not relevant that the documents requested might prove necessary for Reagens' rights of defence in the context of a court action.

The GC also noted that the failure by the Commission to disclose the names of the undertakings which had made inability to pay applications did not infringe the Commission's obligation to state reasons. The Commission, in its decision, had already set out its reasoning in a clear and unequivocal manner.

This judgment marks another interesting development in the increasing case law relating to requests for access to documents, by both parties which are subject to Commission investigation and by third parties.

An appeal by Reagens against the Commission decision relating to the heat stabiliser cartel is still pending.

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.

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