High Court rules on application for confidentiality ring in competition law case

High Court rules that independent experts should be entitled to inspect inner confidential ring documents

The High Court has ruled on an application for a confidentiality ring in a competition law case in Infederation Limited v Google LLC and others [2020] EWHC 657 (Ch). 

The claimant Foundem (Infederation) provided a search engine that allows consumers to compare prices for goods and services offered on third party websites. Foundem alleged that the defendants Google had abused a dominant position contrary to Article 102 of the Treaty on the Functioning of the European Union and the Chapter II prohibition in section 18 of the Competition Act 1998. There were proceedings in the English courts with a separate action with the European Commission. The European Commission had found that Google had infringed Article 102 by positioning and displaying more favourably in its general search results pages Google's own comparison shopping service compared to competing comparison shopping service. That decision was subject to appeal and the decision of the General Court is awaited. Meanwhile, the English law proceedings continued.

Three confidentiality rings were established by High Court orders:

  • A confidentiality ring, which included the founding members of Foundem.
  • An inner confidentiality ring, referred to as the "LEO" (legal eyes only) ring, comprising external solicitors and counsel as well as economic experts.
  • A more restricted inner confidentiality ring, referred to as the "RLEO" ring, which comprised, on the side of Foundem, ten named external solicitors and counsel.

Foundem identified and appointed an independent expert and sought an order that he be admitted to the confidentiality rings to address the evidence in Google's pending application and to assist in the assessment of disclosure for the trial. Google refused to agree to his admission to the LEO and RLEO rings.  

The court’s decision

The court reviewed the relevant case law and observed that in a number of competition cases, and also in intellectual property cases, some parts of the evidence at the final hearing have remained subject to a confidentiality ring of lawyers and experts. Generally, the parties agree to these arrangements, although they still require the approval of the court, having regard to the principle of open justice. 

The important points to emerge from the case law are that: (i) such arrangements are exceptional; (ii) they must be limited to the narrowest extent possible; and (iii) they require careful scrutiny by the court to ensure that there is no resulting unfairness. Any dispute over admission of an individual to the ring must be determined on the particular circumstances of the case.

In reaching its decision in this case, the court had particular regard to the following matters:

  • The action was still at a relatively early stage. However, although Google's pending application was technically an interim application, as it sought to strike out or obtain summary judgment, it had the potential to dispose of a significant part of the proceedings.
  • The RLEO material, in particular, remained highly confidential and Google was legitimately concerned to prevent it becoming known to Foundem or used by third parties. It was of great sensitivity.
  • Google had chosen to put in and rely on significant evidence, including confidential evidence from what were in effect two technical witnesses, exhibiting documents containing technical details, in support of its application.
  • To properly understand that evidence, Foundem's lawyers needed expert assistance. Without such assistance Foundem's lawyers were not in a position to make meaningful submissions on that evidence or contest what was said about the RLEO documents. The evidence sought to explain the operation and aims of Google's ranking algorithms, and how they had been applied to shopping comparison sites generally and Foundem in particular. Another witness statement dealt with the Google's AdWords program.
  • Foundem was similarly entitled, to resist Google's application, to consider the other evidence disclosed by Google to ascertain if that material would put the arguments being advanced by Google about the operation of its algorithms regarding comparison websites in a different light: this therefore covered the other LEO documents. The court accepted that the expert reasonably needed to see them.
  • Although the European Commission may not have needed outside expert assistance to reach a view on Foundem's complaint, the court was not aware what internal technical resources and expertise the Commission has available and in any event it could not be compared to a firm of English solicitors and counsel. Nor was it clear how far the Commission investigated those aspects of Foundem's complaints or whether it chose rather to concentrate its attention on the favourable treatment given by Google to its own shopping comparison website.

It is fundamental that a party in litigation is not bound to appoint as its own expert someone proposed by the other side. The court considered that the expert should be entitled to inspect the LEO and RLEO documents, against an appropriate confidentiality undertaking to the court. As he was based in Germany, he also needed to accept the jurisdiction of the English courts.

Court observations on assertions of confidentiality

The court added that there is an increasing tendency for excessive confidentiality claims to be asserted over documents and information in competition law proceedings, only for those claims to be curtailed or renounced in response to protests from the other side or intervention by the court. It was the court’s understanding that the same is the case in intellectual property proceedings. This is wasteful of time and costs, and it is not the way modern litigation should be conducted.

The court said that there are of course legitimate trade secrets and currently confidential information that merit protection. However, parties and their advisors should appreciate that redactions from documents on confidentiality grounds before inspection and any restriction on inspection to a confidentiality ring are exceptions to the normal regime for disclosure and inspection of relevant documents. 

The decision as to whether confidentiality should be claimed for a document ultimately rests with the client, subject of course to the potential for determination by the court. But just as solicitors will not unquestioningly accept their client's view as to which documents are relevant for disclosure, the judge considered that they should not necessarily be satisfied by their client's view that open inspection of a document should be restricted on confidentiality grounds. Solicitors should advise their client as to the proper limits of confidentiality, given the protection for all disclosed documents under the Civil Procedure Rules, as well as EU case law. If solicitors have reasonable grounds for supposing that their client has made excessive confidentiality claims, they should investigate the matter carefully and discuss it with their client.


Published: 2020-04-06T16:00:00

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