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26 February 2009
The antitrust commissioner has the power to request any information that it deems necessary for the proper implementation of the Antitrust Law. He makes extensive use of this power by issuing formal and informal data requests, which mainly relate to merger control proceedings and reviews of applications to exempt restrictive arrangements. In addition, the antitrust commissioner receives significant business data from interested parties that submit merger and restrictive arrangement notifications. The end result is that the antitrust commissioner is in possession of highly sensitive business information, the exposure of which may have detrimental effects for the companies that supplied it.
In the past, the disclosure of information obtained by the antitrust commissioner was mainly raised in proceedings before the Antitrust Court relating to appeals of decisions of the antitrust commissioner. In several decisions the Antitrust Court acknowledged the need to protect sensitive business information that is obtained by the antitrust commissioner. The court stated that this need requires a restriction of the right of appellants to view the relevant data upon which the antitrust commissioner's decision is based. The court backed up these rulings with concrete procedures that balance the conflicting interests (eg, by subjecting disclosure to confidentiality agreements and using aggregate data).
In contrast, courts and practitioners have given little attention to the possible exposure of business data held by the Antitrust Authority under the Freedom of Information Act, enacted by Parliament in 1998.
The recent Tel Aviv District Court decision in Ater v The Israeli Antitrust Authority gives important guidance on the application of the Freedom of Information Act to sensitive business data submitted by firms to the Antitrust Authority through notification forms, responses to data requests or voluntary submissions.
A few years ago the Antitrust Authority launched an extensive inquiry into assessing the competitive effects of exclusivity contracts in shopping malls. For that purpose the Antitrust Authority gathered information from relevant parties. Once the investigation was over, the Antitrust Authority received a petition from an economist who wanted to prepare a research paper on the subject using all the relevant data gathered by the Antitrust Authority, which included the business secrets of several parties. The petition, which was made according to the Freedom of Information Act, was denied by the Antitrust Authority. It argued that the Freedom of Information Act was not enacted for such purposes and the petitioner's interest in receiving the data was far weaker than the interest of the owners of the data in keeping it confidential.
The Antitrust Authority also argued that exposure of the data would discourage firms from cooperating with future investigations. The court rejected the Antitrust Authority's argument in part, stating that under the Freedom of Information Act a petitioner has the right to access the Antitrust Authority's files for any purpose (including an academic purpose). However, the court ruled that such right must be balanced against the rights of the third parties that own the information and the Antitrust Authority which seeks their cooperation in the future. For that purpose the court distinguished between 'public information' (ie, processed information) and 'private information' (ie, raw information collected by the authority from interested parties in order to perform its duties). The court stated that where the information is private and the parties were compelled by law to supply it to the Antitrust Authority, it will not normally be revealed.
Multinational companies often submit information to the Antitrust Authority in the course of pre-ruling and merger approval applications. They also respond to written and oral data requests. The information that they pass to the Antitrust Authority often includes sensitive business data. This new ruling emphasizes the need to monitor any correspondence with the Antitrust Authority legally. Such monitoring will enable the company to maximize the protection of its business secrets while preserving other important interests.
For further information on this topic please contact David Tadmor, Shai Bakal or David Gideoni at Tadmor & Co by telephone (+972 3 684 6000) or by email (firstname.lastname@example.org or email@example.com or firstname.lastname@example.org).
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