Marked “confidential”

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When the antimonopoly authority examines a case at the pre-trial stage, the balance of the parties’ interests should be maintained. However, it is fairly difficult to achieve such balance in practice. The above specifically concerns defendants who may have difficulties with obtaining access to information in the case and, therefore, ensuring that their rights are protected effectively. Only adjusting law enforcement approaches will help a whole range of issues in this sphere to be settled.

The first issue is to ensure that the parties involved in the case have access to the case files containing commercially confidential information. The above is relevant when any elements of an antimonopoly offence are examined, no matter whether these involve a cartel, unlawful coordination, or an abuse of a dominant position.

It has always been difficult for defendants who are already in the most vulnerable position to obtain access to such materials. The Antimonopoly Service still often denies parties to a case an opportunity to familiarise themselves with commercially confidential materials in the case that other parties provided. The denial is grounded in article 26 of the Law on Protecting Competition (the “Law”), which obliges the antimonopoly authority to comply with commercial secret.

Attempts to solve this issue have also been made at the legislative level. The fourth antimonopoly set of amendments supplemented the Law with article 45.2, which came into force in December 2015. According article 45.2(3), information for which a regime of commercial confidentiality has been established and which are part of the case files may be provided for review to a party involved in the case at the consent of the owner of such information and provided that the specified party undertakes under signature not to disclose the information. However, owners of such information usually do not provide their consent. Actually, the algorithm of the procedure for accessing the case files that contain commercially confidential information does not work.

When the parties involved in the case file documents with the Russian Federal Antimonopoly Service (“FAS Russia”), they may claim that the entire information is commercially confidential. Often even a claim stating that an antimonopoly offence has been committed and subsequent replies to requests based on which the regulator determines the elements of an offence are included in the case files as information that is commercially confidential. The claimants (interested parties) use all means to ensure that other parties involved in the proceedings do not disclose it.

Another issue is that Federal Law No. 98-FZ “On commercial secrecy” dated 29 July 2004 establishes a procedure for classifying information as commercially confidential. However, the parties involved in the case often abuse their right and, on purpose and without any grounds, provide FAS Russia with information to which such status is attributed.

The antimonopoly authority may request evidence that the party providing the information has taken measures to ensure the confidentiality of the information that is commercially confidential (clause 4 of Clarifications No. 13 of the Presidium of FAS Russia dated 21 February 2018 “On information that constitutes a commercial secret when a case is examined that involves a violation of antimonopoly legislation, when antimonopoly compliance audits are held and when state control is exercised over economic concentration”).

However, in practice the regulator sometimes refrains from such audits even when it receives a petition from the defendant or another party involved in the case, to hold an audit with respect to whether a regime of commercial confidentiality has been established. This only aggravates the situations when claimants (interested parties) act in bad faith and undermines the opportunity for defendants to exercise the right to have a case examined comprehensively, fully and objectively.

The third issue comes down to the fact that a ruling to refer a case for examination must also contain grounds that have caused such case to be initiated (article 44(14) of the Law). Meanwhile, in such a ruling FAS Russia often discloses the circumstances and evidence based on which a conclusion was made that elements of an offence were in place, without clearly specifying the specific grounds for initiating the case. Sometimes the ruling refers to a claim stating that the antimonopoly legislation has been violated for which the examination period has already expired, without pointing out other new circumstances that have caused the case to be initiated.

Therefore, doubts arise with respect to whether the issuing of an order to initiate a case and of a ruling to refer the case for examination is lawful in such circumstances.

Resolution No. 2 of the Plenum of the Russian Supreme Court “On certain issues arising in connection with courts applying antimonopoly legislation” dated 4 March 2021 (the “Resolution”) confirmed that FAS Russia’s orders to initiate a case might be challenged as non-regulatory legal acts based on grounds that exclude the possibility of a case being initiated in accordance with article 44(9) of the Law. Such a ground may be that the claim does not contain any new evidence of which the antimonopoly authority was not previously aware.

We believe that filing a claim with the court seeking to challenge the order to initiate a case and the ruling to refer the case for consideration is a measure of last resort that the defendant may sel ect to protect its right to have the case examined comprehensively, fully and objectively. However, if the law enforcement practice of the antimonopoly authority does not change in the near future, such measure may prevail.

Finally, the fourth issue is the situation with “professional claimants”. The Law on Protecting Competition provides for a fairly weak mechanism for combating the cases when one and the same person files claims on multiple occasions with respect to the same facts and the same business entity when this person previously filed a claim and the antimonopoly authority refused to initiate a case based on such claim. Since it is often impossible to identify in detail fr om “open” case files all of the grounds for such case to be initiated, the only thing that the defendant can do is to file a claim with the court to challenge the regulator’s order and to seek through the court to have the entire information about such grounds disclosed.

As we can see, pre-trial proceedings in antimonopoly cases in practice have substantial drawbacks. An adversarial nature of the relationship between the parties cannot be achieved without eliminating such drawbacks.

We believe that the regulator’s law enforcement approaches should be adjusted, since investigating the materials and evidence that all the parties to the process file directly with the antimonopoly authority plays the principal role in the examination of the case.

The Plenum of the Russian Supreme Court came to the same conclusion in clause 55 of Resolution No. 2: court proceedings do not substitute the procedure for considering an antimonopoly case established by the Law on Protecting Competition. The court also emphasised that the regulator should, specifically when a case is being examined, investigate the evidence that served as a ground for the case to be initiated. Additional evidence may be investigated in court proceedings only if the person filing a petition to accept it, including the antimonopoly authority, has substantiated that the evidence could not be provided at the pre-trial stage for reasons beyond such person's control and the court acknowledges such reasons as valid. In particular, if there were objective obstacles for the evidence to be obtained and/or provided before the challenged judgement was issued.

To ensure that specifically the antimonopoly authority examines the case comprehensively, fully and objectively, the parties involved in the case should be given an actual opportunity to timely familiarise themselves with the case files, including those that are commercially confidential, in their entirety and to obtain information about the actual circumstances that served as grounds for the case to be initiated. It is only when the above condition is met that the parties involved in the proceedings, including defendants, will be able to effectively defend their rights and lawful interests and to provide evidence that is of crucial significance for the examination of the case.

Otherwise, the number of claims filed with the court seeking to challenge various judgements of the antimonopoly authority will significantly increase.

Source: Competition and Law

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