Existing practice
New case law
Confidential information
Comment
The Czech courts recently handed down decisions on access to administrative files that will have an impact on all proceedings in the competition arena. Under certain circumstances, third parties can now apply for access to such files and, if granted access, view a non-confidential version of the files. This may stimulate parties to proceedings to reconsider the non-confidential status of information provided in a filing. It will also impose a considerable burden on the Competition Authority and may prolong proceedings.
The Administrative Code provides that parties to all administrative proceedings (and their representatives) have the right to access files, even after a decision has been issued. However, since neither the rights of parties to the proceedings and other persons involved nor the public interest can be infringed, third parties can access the files only if they can prove a legal interest or other serious reason.
In relation to competition law, the Competition Authority has not allowed anyone except for the parties to proceedings to access administrative files and has always turned down any application by a third party asking for access, due to lack of a legitimate interest (eg, serious reason, legal interest or public interest). The authority has never considered any third-party interest to be legitimate. This approach has subsequently been confirmed several times by the administrative courts. However, in light of recent case law, things look set to change.
The Supreme Administrative Court recently stated (in a decision subsequently followed by the Brno Regional Court) that:
"should a legitimate interest or another serious reason of a third party to gain access to the administrative file be sufficiently proven, the administrative authority shall only assess whether the access might infringe any right of the parties to the administrative proceedings or any other affected parties or public interest."
As a result, the authority must reconsider its future approach to any third party that claims a legitimate interest in accessing administrative files. One such legitimate interest could be a third party's concerns about distortion of competition. According to the Supreme Administrative Court, the third party can prove such legitimate interest by demonstrating its active approach (ie, by filing a complaint to initiate proceedings or to revise precedent proceedings, or by submitting objections to the notified transaction). By so doing, the third party can demonstrate its concerns in relation to distortion of competition. A claim for damages can also be considered a legitimate interest, but only when the third party can prove that the evidence to prove its claim for damages compensation cannot be obtained by any other means.
The authority is entitled to consider whether the legitimate interest of a third party should be recognised and proved. The authority must also approve and ensure that any right of the parties to proceedings or other affected parties (eg, a targeted company in concentration proceedings) will not be infringed by access being granted to a third party. If this is confirmed, the authority is obliged to grant the third party access to the administrative files.
The authority will first need to review the information in such files to ensure that no confidential information (eg, business secrets or other sensitive information) is likely to be revealed to the third party. For this reason, the authority must be provided with a non-confidential version of the files and their annexes, which contains no business secrets or other sensitive information. The parties to the proceedings already provide the authority with a non-confidential version of all submitted documents, since other parties to the proceedings have access to the administrative files. However, they must now consider whether to remove additional information that should not be provided to third parties.
The new obligation to grant access to third parties imposes an extensive burden on the authority. It will need to assess the legitimate interest of every third party that applies for access to the files. It must also clarify the non-confidential versions of files with the parties, as it will be responsible for any leak of sensitive information. As a result, the authority is expected to grant access to a limited amount of documents only. Therefore, third parties may expect not to have access to relevant information. Parties to proceedings will also need to spend more time preparing their submissions to the authority, since they may want to prepare three versions:
- a full, confidential version for the authority;
- a non-confidential version for parties to the proceedings; and
- a non-confidential version for third parties.
The decision-making process of the authority may also be considerably prolonged.
For further information on this topic please contact Jitka Linhartová at Schoenherr by telephone (+420 225 996 500), fax (+420 225 996 555) or email ([email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.
