12 Sep, 2018

Challenging the right of the public to access “protected information” in Serbia

The year 2018 is witnessing a period of constant developments and dynamics in the area of competition law in Serbia.

The latest news concerns a constitutional challenge against Article 45(4) of the Competition Act of Serbia (“Competition Act”), submitted by the Commissioner for information of public importance and personal data protection (“Commissioner”). Said provision exempts information gathered for the purpose of conducting competition proceedings, which are considered as ‘protected information’ to be disclosed to the public under the Free Access to Information of Public Importance Act (“Free Access Act”).

In Commissioner’s view this provision seems to be in discord with the Constitution of the Republic of Serbia (“Constitution”) and the relevant provisions guaranteeing the right to access to information of public importance embodied notably in Article 10 of the European Convention of Human Rights and Fundamental Freedoms (“ECHR”).

It looks like that another hot topic will draw attention and provoke interesting discussions within the competition community of Serbia and the Balkans.

The Commissioner joins the club

Prior to this most recent constitutional challenge against one of the provision of the Competition Act the Serbian National Bar Association in 2017 took similar steps, while the Chamber of Commerce and Industry of Serbia emphasized the need for normative improvements of the Competition Act and proposed amendments to the Competition Act in order to create a more secure and improved business environment. The Commissioner is the newest member of the club.

The right to access information kept by public authorities in accordance with the law is guaranteed by the Serbian Constitution[1]. According to Article 2 of the Free Access Act, information of public importance is stipulated as information (i) held by a public authority, (ii) created during a public authority’s work or related thereto, (iii) which is embedded in a document, and (iv) concerns any issues the public has a justified interest to know. The Free Access Act establishes a presumption of  existence of justified public interest to be aware of a particular information. While such justified interest indisputably exists in cases of a threat to, or protection of, public health or the environment, in other cases the public authority as holder of the information is permitted to prove otherwise[2].

In that respect, the interests of state security, protection of public health, efficient prosecution of crimes, state economic interests and international relations prevail over the public interest to disclose information and the access to ‘state, business, official and other secrets’ should be denied[3]. However, the Commissioner still remains the sole authority to strike a right balance between these conflicting interests.

Turning back to competition law, under the challenged provision of the Competition Act, any interested party is entitled to request measures for protection of the information’s source or specific data provided to the Commission for Protection of Competition (“NCA”), if they can prove the likelihood of damages arising from the disclosure of data. The NCA’s President is the one to decide which information shall be regarded as confidential, hence, is granted with extensive discretionary rights by the Competition Act. The odds are such that actions of the NCA’s President may be detrimental to the interested parties, should the confidentiality status is not provided for specific information.

Furthermore, the Commissioner considers the importance of the public to know all processes of their concern, competition investigations and proceedings included, and questions the discretionary powers of the NCA, which may result in some documents to be omitted from public scrutiny. More precisely, in the Commissioner’s view, the fact that certain information declared “protected” by the NCA cease to have the status of information of public importance in the sense of the Free Access Act especially due to  the case of ‘conflict of laws’, leads to absolute impossibility to exercise the right of the public to access said information. Such denial further “clears the way to corruption and other forms of misuse of powers […]” and “jeopardizes the unity of legal order of the Republic of Serbia […]”. Consequently, the rule of law is being tested.

It is clear that a complex tension exists between basic interests – the right to access to information of public importance and the protection of confidential information, which is essential for both the defense of the party subject to the competition proceedings and protection of its commercial interests.

EU Case law – striking the right(s) balance

The conciliation of the opposing interests by striking the right balance between rights and the values they entail is certainly one of the primary goals of EU legislators.

In general, Regulation (EC) No 1049/2001[4]  (“Regulation”) awards the right to access documents in possession by the European Parliament, Council and Commission and access to documents may not be refused if an overriding public interest exists. However, these institutions shall refuse access to a document where the disclosure would undermine the protection of court proceedings and legal advice, the purpose of inspections, investigations and audits, but also the commercial interests of a natural or legal person. EU case law[5] confirms that the burden of proof of the negative consequences of the disclosure lies with the institution which decides to refuse access to a document.

At the same time, specifically with respect to competition proceedings, Council Regulation (EC) No 1/2003[6] guarantees access to Commission’s case file, but such right does not extend to “confidential information and internal documents of the Commission of the competition authorities of the Member States”.  The highest judicial institution of the EU confirmed that the commercial interests of the parties involved in the proceedings and protection of the investigation itself may prevail over the interest of the public for the disclosure of the case file[7].

Finally, in proceedings relating to an action for damages for infringements of the competition law provisions, national courts may order a defendant or a third party to disclose relevant evidence which lies in their control providing that such request is justified on the basis of reasonably available facts and evidence sufficient to support the plausibility of the claims for damages[8]. However, national courts cannot order the disclosure of evidence containing leniency statements or settlement submissions.

The Competition Act: a Pandora box of open questions

It is clear that the Competition Act is still giving many headaches not only to undertakings but also to public authorities. The continuous constitutional challenges that are being initiated by various stakeholders are a proof that the Competition Act needs to be replaced or amended in order to ensure the rule of law and the protection of rights of the undertakings involved in antitrust proceedings.

The discretionary rights of the NCA’s President to decide whether an information should be declared “protected” or not, without precise guidance and conditions prescribed by the law, is surely an issue of major concern. The difficulties the undertakings are facing may be reflected by other provisions of the Competition Act which are, however, left out in the most recent Commissioner’s constitutional challenge. In fact, insufficiently clear conditions referring to existence of a ‘suspicion in the abuse of privileged communication’ under which the NCA’s President is entitled to disclose a legally privileged communication despite detrimental consequences such decision may produce, demonstrate urgent need to improve the competition legal framework in Serbia.

In addition, other statutes of Serbia are not cleared from shortcomings. The current Free Access Act for instance still refers to sensitive information classified as “official secrets” for applying the exceptions to the right to access to information of public importance, although such notion ceased to exist since the Data Secrecy Act[9] has been promulgated.

Therefore, a solid and comprehensive harmonization of the Serbian legal framework regulating the confidentiality of information is essential for creating a stable legal environment based on certainty and the rule of law.

Furthermore, should the Constitutional Court adopt the views of the Commissioner, a potential legal void might occur in relation to the confidentiality of information and documents used in competition and antitrust proceedings. Would the Commissioner have overall jurisdiction over information and documents used in competition investigations? Would that give the Commissioner an overstretching authority over matters not in its field of competence? While the EU law recognizes that the freedom to access information cannot be applied should the disclosure inter alia undermine the “commercial interests” of the interested party, the Serbian Free Access Act does not even contain provisions mentioning this kind of sensitive information.

It is the hope of many that ongoing EU accession negotiations will contribute to necessary reforms in Serbia with the aim to create a more favorable and harmonized legal environment not only for the development of the competition, but also for enhancing the respect of rights of undertaking and other stakeholders operating in the Serbian market.

 

 

[1] Article 51 of the Constitution.

[2] Article 4 of the Free Access Act.

[3] Article 9 of the Free Access Act.

[4] Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, OJ L 145/43, May 31st, 2001.

[5] ECJ, Sweden and Others v API and Commission, Joined Cases C-514/07 P, C-528/07 P and C-532/07 P, EU:C:2010:541, para. 72.

[6] Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1/1, January 4th, 2003.

[7] E.g. ECJ, Commission v. Éditions Odile Jacob, C-404/10 P, judgement of June 28th, 2012.

[8] Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349/1, December 5th, 2014.

[9] Official gazette of the Republic of Serbia, no. 104/2009.

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