In a widely noticed judgment, the German Federal Supreme Court has recently decided that the cartel authority of the state of Hesse acted unlawfully when categorically denying access to a settlement file to a third party damage claimant. After re-visiting two German landmark cases concerning access to the file in Germany (see below I. and II.), we briefly summarise the Federal Supreme Court’s decision (see below III.). We conclude that the decision, building on existing practice, strikes the right balance between incentivising cartel participants to come forward on the one hand (i.e., by protecting the integrity of settlement procedures), while acknowledging the need for cartel victims to enjoy effective redress for cartel damages.
I. Situation post-Pfleiderer (2011)
The first of a series of recent German judgments on access to cartel-related files held by public authorities was a judgment by the district court of Bonn.1 In this case, the district court had to decide whether a claimant, Pfleiderer Holzwerkstoffe GmbH (Pfleiderer), should be permitted access to the German Federal Cartel Office (FCO)’s file on the cartel proceedings against the three largest European manufacturers of decor paper to substantiate a private damage claim brought by Pfleiderer. The three manufacturers had been subject to a EUR 62 million fine for price and capacity fixing imposed by the FCO, and Pfleiderer was trying to base a private damage claim on this anti-competitive behaviour.
The district court of Bonn referred to the European Court of Justice (ECJ) 2 the question of whether access to the FCO’s file constituted a violation of EU competition law rules. The ECJ held in its famous Pfleiderer judgment3 that European law generally did not prevent access to cartel files under national laws. At the same time, however, it was the national court that had to decide whether or not to grant access to the file under national law, weighing up potentially conflicting interests protected under EU law (protection of leniency rules on the one hand; legal protection of a damage claimant on the other hand). The ECJ thus handed the final decision back to the district court of Bonn.
The district court’s verdict, applying Pfleiderer, was that the claimant should not get access to the cartelists’ leniency applications. Access to these documents would endanger the future feasibility of applying for leniency, and thus impair the possibility to investigate and learn about cartel conduct.4 Equally, business secrets of the companies involved would have to be protected against access to the file by third-party claimants. The district court of Bonn did, however, grant access to other exhibits in the file (without specifying further the content of these exhibits).5
II. OLG Hamm (2013)
In 2013, the higher regional court of Hamm (OLG Hamm) decided on whether the regional court of Berlin could request access to a file held by the state prosecution service of Düsseldorf.6 The regional court of Berlin requested access to this file in connection with a pending third party damage claim brought by an alleged victim of an elevator and escalator cartel. The state prosecution service’s file contained, inter alia, the leniency applications of participants of said cartel, as well as the confidential version of the European Commission’s decision in which it imposed a fine of more than EUR 600 million.7
The OLG Hamm decided that the regional court of Berlin should get access to the entire file, including the leniency applications and the confidential version of the European Commission’s decision. This is because it was not an individual person, but another court, which was asking for access in this specific case. Another court would have to have access to the entire file, and not just parts of it.8 Also, the regional court of Berlin itself would have to decide separately and on its own merits if, and to what extent, it should grant access to the file to the third party damage claimant.9
III. BGH regarding settlement in Hesse (2015) – Any immediate impact?
In the most recent decision regarding access to file in Germany, the German Federal Supreme Court (Bundesgerichtshof – BGH) had to decide on whether the state cartel authority of the state of Hesse (Landeskartellbehörde Hessen) was right in refusing a third party claimant access to a settlement file concerning an abuse of dominance case. 10
On appeal from the Higher Regional Court of Frankfurt, the BGH held that the Landeskartellbehörde Hessen acted unlawfully in categorically denying access to the file. Instead, the Landeskartellbehörde should have exercised its discretion and come to a reasoned decision, having weighed up the arguments before it. 11 The third party claimant’s potential damage claim against the dominant company should at least have constituted a legitimate interest for gaining access to (parts of) the file.12
Overall, we regard the BGH’s decision as well balanced. It still allows protection of cartel participants and their submissions made in relation to settlement proceedings (or others), yet it does it categorically exclude any access to the file for those third party claimants that are potential victims of cartel behaviour.
It remains vital to an effective and sound competition regime that cartelists are incentivised to agree to settlements, thereby binding fewer resources of competition authorities.
Further clarity should be brought about by the implementation of the EU’s antitrust damages actions directive.13 Article 6(6) stipulates: “Member States shall ensure that, for the purpose of actions for damages, national courts cannot at any time order a party or a third party to disclose any of the following categories of evidence: (a) leniency statements; and (b) settlement submissions.” The directive’s implementation in Germany is still pending (the deadline for implementation is 27 December 2016).14 Once implemented, this will lead to a welcome clarification of the extent of protection for leniency statements and settlement submissions.