In two judgments published in July 2014 the Competition Appeal Tribunal (CAT) ruled in favour of applicants seeking disclosure of documents from the Competition and Markets Authority (CMA) case file concerning completed investigations. The judgments arose in connection with appeals against the CMA's decisions in the private healthcare market investigation and a hotel online booking case. In each case the CAT weighed the benefits to the applicant of granting disclosure against the burden of disclosure falling on the CMA. Fairness and the need to ensure that parties are on an equal footing trumped practical and procedural considerations on each occasion.
These cases indicate the importance of procedural fairness and equality of arms when it comes to disclosure issues – even when the right of appeal is more limited than a full merits review, as applies to the CAT's review of CMA decisions. The cases suggest that parties bringing appeals in relation to CMA investigations will have strong grounds for disclosure of documents that are crucial to understanding the CMA's reasoning and approach.
In the first judgment, published on July 25 2014, applicant HCA International Limited had challenged the CMA's findings in the private healthcare market investigation.(1) The CMA published its final report on the matter on April 2 2014, requiring (among other things) the divestiture by HCA of some of the private hospitals that it owned. On May 30 2014 HCA applied to the CAT for review of these findings. One of HCA's primary grounds for challenge was the CMA's reliance on its insured prices analysis. The insured prices analysis was derived from raw data gathered during the course of the investigation by the CMA's predecessor – the Office of Fair Trading (OFT) – from private hospitals concerning charges that they had made to individuals and insurance companies for healthcare services. As part of its analysis, the CMA 'cleaned' and aggregated the raw data to derive average figures for particular procedures in order to conduct a comparative analysis of whether charges made by particular private hospitals or operators were in sync with those of others. The CMA also applied statistical analyses, including regression analysis. HCA sought disclosure of:
- the raw data;
- the cleaned data;
- full details of the CMA's methodology;
- the full set of results from each step of the analysis; and
- the full set of results from any sensitivity analysis or robustness checks performed by the CMA.
The CMA characterised HCA's application as a fishing expedition and argued that the level of disclosure sought went well beyond that required in judicial review proceedings. It claimed that the provision of such a vast amount of data was unnecessary and that it would be disproportionately burdensome for the CMA to provide it. It also argued that in the absence of proper precautions being put in place, disclosure of the insured prices analysis data could of itself be detrimental to the maintenance of a competitive private healthcare market, as the data contained highly sensitive commercial information; thus, disclosure to HCA could give it an unfair commercial advantage.
In ruling in favour of disclosure, the CAT noted that the analysis critically formed the basis of the CMA's findings on which it had relied in reaching its conclusions on divestment. It found that to deny HCA access to the data would render it "practically disabled from making the best case it can"(2) in challenging the CMA's findings and the application should therefore be allowed on the grounds of fairness. The CAT was not unsympathetic to the CMA's concerns about the practical difficulties of granting access to the data, but considered this a matter to be resolved through discussion between the parties.
On July 28 2014 the CAT ruled in favour of the disclosure to online travel agent Skyscanner Limited of the non-confidential version of the statement of objections(3) issued by the OFT on July 31 2012 in connection with its investigation into the online supply of hotel rooms.(4) Skyscanner was not a party to the investigation, but had brought an appeal under Section 47(1)(c) of the Competition Act 1998 against the OFT's decision to accept commitments to remove certain discounting restrictions for online travel agents. Skyscanner relied on two grounds in support of its application:
- Disclosure was necessary to ensure equality of arms, as it was the only party to the appeal not to have seen the statement of objections.
- The statement of objections was relevant to the identification of the OFT's competition concerns and thus the commitments that these were intended to address.
The CMA (supported by the online travel agents that had accepted the commitments) argued that such disclosure was unnecessary, as Skyscanner was not a party to the original investigation and had managed to plead its case without seeing the statement of objections.
The CAT rejected the CMA's characterisation of Skyscanner's request as a fishing expedition to find further grounds of appeal, holding that the statement of objections may well contain material relevant to the appeal. In addition, the CAT found Skyscanner's arguments concerning the notion of equality of arms persuasive and ruled that in order to ensure a fair hearing, it was necessary that all parties had seen all relevant documents.
These cases demonstrate that the principles of fairness and equality will override more practical considerations when it comes to matters of disclosure. However, there are positive signs that the CMA intends to adopt a more open approach going forward. Earlier this year the CMA published its new policy on transparency and disclosure, in which it promotes transparency "as a means of achieving due process and ensuring that parties directly involved in a case are treated fairly".(5) The policy states:
"Ensuring due process for those directly involved in the CMA's work and effectively engaging with other interested persons in turn improves the effectiveness and efficiency of the CMA's work, and the quality and robustness of its decision-making."(6)
The CMA thus explicitly recognises the need for effective engagement with parties as a means to ensure robust decision making.
For the parties involved in or affected by investigations, these cases demonstrate that access to CMA documents can be obtained through rights of appeal in the CAT. More importantly, under the new regime, the time and expense of relying on appeal rights may be avoided by actively pursuing the CMA for documents during the course of an investigation – if you don't ask, you don't get.
For further information on this topic please contact Mark Simpson, Caroline Thomas or Susanna Rogers at Norton Rose Fulbright by telephone (+44 20 7283 6000), fax (+44 20 7283 6500) or email (email@example.com, firstname.lastname@example.org or email@example.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com
(2) See www.catribunal.org.uk/files/1229_HCA_%20Ruling_CAT_11_250714.pdf, at paragraph 31.
(3) A statement of objections sets out the authority's case against the party or parties under investigation; it is a draft decision that the authority proposes to adopt and is provided to the subject of the investigation to allow it to exercise its rights of defence.