PT Competition Court rejects CTT’s request for access to confidential documents not quoted in S.O.

Today, 14 December 2016, there was another ruling in the long, ongoing saga of disputes in Portugal over access to documents by companies accused of antitrust infringements. The Competition, Regulation and Supervision Court (CRSC), of Santarém, has reaffirmed a point which seems to be on the verge of becoming settled case-law: that defendants may only have global access to confidential documents if these are used against them by the Portuguese Competition Authority (PCA); for others, they must make a case-by-case justification for access to any individual document.

This case relates to the Statement of Objections (S.O.) sent by the PCA to CTT, expressing the intention to find that the Portuguese postal incumbent has abused its dominant position by refusing access to the postal distribution network to competitors in retail postal markets (PRC/2015/04).

On 7 September 2016, the PCA allowed external legal and economic advisers of CTT to consult, in a PCA data room, the non-confidential file and confidential documents quoted in the S.O., but it refused to allow them access to other confidential information in the file supplied by third parties, not mentioned in the S.O.

CTT appealed this decision arguing, inter alia, that: (i) the PCA should have effectively controlled whether all the information was actually confidential; and (ii) it had a right to access all documents in the file, and that it is not up to the PCA to decide whether they are relevant for the defence or not.

The case was a rare loss for the Vieira de Almeida team, led by Nuno Ruiz.

The Court adhered to a previous ruling in the banking cartel case (225/15.4YUSTR), by another judge, confirmed by the Lisbon Appeal Court, showing a tendency for homogeneity in the interpretation of the law by the Court.

The CRSC is to be congratulated for striking a very difficult balance between the letter of the CA – which is overly focused, in this regard, on the PCA’s concerns alone –, and the general principles of law, general rules of access to administrative documents and fundamental rights of the defence in our legal order.

While the ruling is subject to interpretation, I believe the Court’s position may be summarized as follows:

a)      In this specific case, the company only asked for access to the confidential documents mentioned in the S.O., and it was granted access to those strictly in accordance with Art. 33(4) CA;

b)     But even if its request were interpreted (also) as a general request for access to all the other confidential information, not quoted in the S.O., it would have to be rejected;

c)      The Court cannot ignore the letter of the CA, which clearly imposes a different regime for access to confidential documents quoted and those not quoted in the S.O.;

d)     Confidential information provided by third parties must be protected. For documents quoted in the S.O., the law finds a balance through general access and the use of data rooms and circles of confidentiality. For other documents, not used in the S.O., a solution needs to be found that is slightly less than the other, more protective of the rights of third parties.

e)     Access to confidential information not quoted in the S.O. is possible, but it is dependent on a case-by-case assessment, subject to a test of proportionality. In order to make this possible, the defendant must be allowed access to a list of confidential documents with sufficient information to allow them to present a reasoned request for access to specific documents.

This accurately reflects the general solution of the Portuguese legal order for access to confidential information of third parties.

One might say that this line of judgments puts to rest the disputes over the fact that the PCA cannot be allowed to decide, on its own, whether a document is relevant for the defence. In principle, the company can have access to all documents, it just needs to show that is likely to be useful for its defence.

The problem, it may be argued, is that, in practice, the PCA often accepts claims of confidentiality without significant control, and it also does not provide sufficiently detailed lists of documents to allow for duly reasoned requests of access to individual documents. The Court, once again, expressed concern over this.

While perfect in principle, the CRSC’s solution is still to be put to the test in terms of its practical viability. Depending on how demanding the PCA and the Court come to be in controlling the reasoning of a request for access to an individual document, this may come to impose an impossible burden on the system. An impossible burden of sufficiently detailed descriptions of documents on their providers and on the PCA. An impossible burden of sufficiently reasoned requests on the defendants, who will often be able to say no more than “There may be something relevant to prove [X] in these email exchanges about [Y]”. This is a complete guess. It may or may not be true, and only detailed examination will allow that determination. So much so that one might wonder if this whole exercise is nothing more than a charade to make us feel like we’re striking a balance between the conflicting interests when, really, we’re just pretending to, and the real balance can only be found elsewhere.

Administrative and judicial authorities should put themselves in the place of the providers of the documents asked to draft a detailed description, and of the defendants asked to draft a reasoned request for access, and see how they would do it, if that is feasible and reasonably demandable, and if the end result is actually useful. It may turn out, especially in cases where access is being requested to a very large number of documents – which did not seem to be the case here – that the only proportional solution will be to also resort to data rooms and confidentiality circles.

As litigation has shown – and will continue to –, this area is definitely one which should deserve attention in an upcoming revision of the Competition Act.