Friday, October 11 12:21:06
The UK Competition Appeals Tribunal (CAT) has ordered the UK Competition Commission (CC) to disclose to Ryanair redacted sections of a report in which the CC had instructed the airline to sell part of its stake in Irish rival Aer Lingus.
The CAT has scheduled to hear Ryanair's appeal concerning its minority stake in February next year.
Will Gant, a writer for the Policy and Regulatory Report (PaRR), which is part of the Financial Times Group, said that, in yesterday's case management hearing, the CAT ruled that passages dealing with evidence submitted by third parties ought to be revealed to Ryanair's external lawyers. Some parts of the CC's final report, published on 28 August, were redacted for reasons of commercial sensitivity.
In August the CC had ruled that its decision requiring Ryanair to sell down its stake in Aer Lingus would not conflict with ongoing appeals before the EU courts aiming to overturn the European Commission's (EC) prohibition of the low-cost carrier's bid for the remainder of Aer Lingus, as reported. On 27 February 2013, the EC rejected Ryanair's third bid for Irish flag carrier Aer Lingus. The merger would have created a monopoly or a dominant position on 46 routes, the EC found, in spite of receiving no less than five remedy proposals from the low-cost carrier, as reported by PaRR.
The Ryanair appeal in February will challenge a CC decision that the airline's 29.82pc stake in Aer Lingus constitutes a restraint on competition under the UK's Enterprise Act 2002, and must be reduced to a maximum of 5pc, Mr Gant wrote.
The CC had argued that the redacted parts included submissions from 15 parties including rivals such as Lufthansa, which had been made in confidence, and that disclosure of their contents would deter future participation by third parties in inquiries.
Hodge Malek QC, the tribunal chairman, said disclosure to the airline's external lawyers should take place within seven days, but on the basis that the identities of the third parties remained obscured, the PaRR article said.
Daniel Beard QC, for the CC, had likened the airline's application for unredacted material to an "expansive fishing expedition".
The passages in question are highly sensitive submissions made by third parties to the CC, he said. They are concerned that they provided this information to the CC on the basis of complete confidence - which is why it is redacted, Beard argued.
The CC takes "very, very seriously" the protection of confidentiality of information provided, in particular information provided by third parties, he continued. Beard highlighted that the system "will not work unless you can get information from third parties, who will not give it if they think there is a material risk their key rivals in the market are going to find out their views on what is going on in the market".
He added that he was aware of a "major breach" of the terms of a "confidentiality ring" of the same sort proposed by Ryanair, in which only external lawyers can access material, but did not elaborate. "Those sorts of breaches are a real risk," he said.
Brian Kennelly, for Ryanair, urged the CAT to proceed on the basis that some of the material might be "highly relevant, and we could have made powerful submissions if we had seen it".
He argued that they needed "the material at this stage to assess its materiality." He added: "We have a right to make submissions as to . procedural unfairness - submissions we cannot make without seeing the material."
Kennelly said unredacted versions of the report would remain with a "shortlist" of external lawyers, who would face "very serious professional disciplinary consequences" if they breached confidentiality.
"No damage would be done unless they are suggesting the external lawyers would somehow disclose this information to Ryanair or the public," he said, adding that such a breach would be "unthinkable".
Representatives for Aer Lingus also opposed Ryanair's application.
Ryanair is represented by Brian Kennelly of Blackstone Chambers; Aer Lingus is represented by James Flynn QC of Brick Court Chambers.