The Montenegrin Agency for Protection of Competition on 30 September 2014 published the Notice on Protection of Confidential Business Information in Proceedings before the Agency. The Notice sets out the types of information which can be deemed confidential and the procedure for granting the status of confidentiality.
Who can request confidentiality?
In the proceedings before the Agency, parties usually submit sensitive business information. For example, a notification of concentration should, inter alia, include information on largest suppliers and customers, values of sales and supplies and estimated market shares of concentration participants.
By virtue of Article 38 of the Competition Act (Zakon o zaštiti konkurencije, “Official Gazette of Montenegro”, no. 44/2012), the Agency can declare certain information and sources confidential, if the applicant proves that it is likely to suffer damages if information were publicly disclosed and provided that the interest of the applicant is justified and overrides the interest of the public. The applicant is narrowly defined as a party submitting an initiative to the Agency for an investigation or third party submitting information to the Agency. The definition does not encompass party to the proceedings (concentration applicant, applicant for individual exemption or party to investigation proceedings).
The Notice seeks to rectify this, by extending the scope of eligible applicants for confidentiality status of information to include the party to investigation. However, not even the Notice provides that a party to the proceedings which do not involve investigation (concentration approval in summary procedure or proceedings for individual exemption) can request that its information be granted confidentiality status. In spite of this lacuna, in practice, the Agency does approve confidentiality requests filed along with concentration filing, if the conditions from Article 38 of the Competition Act and further conditions from the Notice are met.
Information that can be protected
According to the Notice, information can be treated as confidential if it falls within one of the following categories: (i) business secrets (especially information on technical and financial know-how, production methods, sources of supply, information on production and sale, lists of customers and suppliers, marketing and promotional plans, costs and price structures, and commercial strategies); (ii) information undisclosed to the public and treated as confidential by its owners or otherwise protected by owner’s commercial policy or contractual obligations; and (iii) other confidential information, if their disclosure to the public could cause harm to the applicant.
Information which is already in the public domain cannot be protected as confidential. The Notice also prescribes that information that has lost commercial value, in particular due to lapse of time, cannot be protected. There is a presumption that information has no commercial value after the expiry of 24 months (it remains unclear when this period starts running), unless information relates to protection of patent or other industrial rights and technical knowledge. One may infer from the relevant wording that this presumption is rebuttable by the applicant. The Notice also prescribes a “general” five-year deadline after the expiry of which information can be granted the confidentiality status only upon the applicant submitting proof that information still contains commercially sensitive elements. This provision was probably inspired by the provision of the European Commission’s Notice on the Rules for Access to File which sets a presumption that information on parties’ turnover, sales, market-share data and similar information which is more than five years old is no longer deemed confidential. It remains unclear under the Montenegrin Notice what is the difference between the 24-month and the five-year deadlines, given that both result in rebuttable presumptions that information has lost commercial value. A possible interpretation is that the longer five-year deadline refers to patent-related information only, although this is not entirely clear from the text of the Notice.
The following information shall not be treated as confidential except in the presence of exceptional and justified circumstances: (i) information on other undertakings; (ii) information already in the public domain (e.g. prices, customer names, distributors and business partners, organizational diagram of parties to the concentration); (iii) facts relating to leniency application, unless disclosure of such facts would jeopardize the leniency procedure; (iv) information which was provided to the authority in earlier proceedings without a confidentiality request having been submitted, or with confidentiality request having been denied; ; (v) information on other competition authorities to which a merger filing was made; (vi) names and positions of employees or other persons directly or indirectly involved in the proceedings before the Agency, and (vii) information which may potentially represent competition law infringement.
Confidentiality request should list all information sought to be protected, and offer detailed reasons why damages can be suffered if information is disclosed, along with an estimate of the threatened damage.
Party to the proceedings may be allowed to examine non-confidential version of the documents from the file which contain third-party information if the Agency finds that the interest of the party to the proceedings prevails over the interest of the third party wishing to protect its information. When balancing these interests, the Agency will in particular “assess the possibility of one [claiming antitrust damages in follow-on action]”. Unfortunately, this part of the Notice is particularly unclear.