June 14 2012
On February 23 2012 the Brno Regional Court(1) defined for the first time the rules that govern access by investigated undertakings to the leniency applications contained in the Competition Authority's administrative file during cartel investigations.
Under Section 38 of the Administrative Code, the authority is obliged to allow parties access to the file during the entire administrative proceeding. When granting access to the administrative file, the code (which also governs administrative proceedings before the authority) does not differentiate among the documents contained therein (ie, between leniency applications and the rest of the administrative file). Parties are entitled to make copies and notes of all documents contained in the file (with the exception of confidential business documents) during the entire administrative procedure.
The authority declined to grant access to the leniency applications throughout a significant part of the cartel investigation, despite the fact that (as the judgment admitted) the leniency applications were the only evidence supporting the authority's allegations. After issuance of a statement of objection, the authority allowed limited access to the leniency application, without enabling the parties to make copies or notes or to use a recording device, following the leniency applicants' claim of business secrets.
The court recognised the necessity of giving special treatment to leniency applications. According to the court, the authority is entitled to restrict or deny access to the administrative file without providing a specific justification. However, such restriction must be clearly limited in terms of time. According to the court, the issuance of the statement of objection constituted a clear time limit. During this stage, the parties to the proceedings were informed of the basic facts of the case, their legal assessment and reference to the main evidence contained in the case file. The court therefore concluded that during the cartel investigation, two phases of access to the leniency applications could be distinguished - access before and access after the statement of objection was issued.
Access before the statement of objection
According to the judgment, Section 38 of the Administrative Code - which allows access to files from the beginning of the administrative proceeding and entitles the parties to make copies - can be interpreted restrictively in regards to leniency applications. The court concluded that the authority had the right to deny access to the leniency applications before the issuance of the statement of objection, because at this stage the authority was collecting evidence of whether there was a breach of competition rules. According to the court, this absolute limitation did not constitute a significant breach of the defendants' rights. The court relied on the following arguments:
Access after the statement of objection
According to the court, Section 38 of the Administrative Code is fully applicable - the leniency applications must be fully accessible and the parties to the proceedings may make copies or take notes. The authority may limit access to the file only with respect to those facts that constitute business secrets of the leniency applicants or any other party to the proceedings. However, the court noted that a leniency application cannot constitute a business secret in its entirety - the business secret comprises only those parts of the application that meet the criteria set out in the Commercial Code.
The court recognised that the right to access for the administrative file is a guarantee of the right to fair trial. In addition, the court maintained that the parties' rights to fair trial were not significantly restricted if the authority allowed the parties to the proceedings to exercise their rights to defence "in another comparable manner". According to the court, the issuance of the statement of objection represented a sufficient substitution for the non-disclosed parts of the administrative file (ie, the leniency applications), and therefore the parties to the proceeding were permitted to exercise their right to defence.
In formulating these conclusions, the court relied mainly on the statement of Advocate General Geeldhoeda in the similar case of Salzgitter Mannesmann v Commission. In that case, the advocate general concluded that the concealment of the source of information intended as documentary evidence for the investigation of cartel agreements did not necessarily amount to a violation of fair trial.
For further information on this topic please contact Martin Nedelka or Mario Vogl at Schönherr s.r.o. by telephone (+420 225 996 500), fax (+420 225 996 555) or email (firstname.lastname@example.org or email@example.com).
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