Goodyear South Africa (Ply) Ltd. And Ors. Competition Commission - (13 Oct 2017)

A document is restricted information, if the disclosure of same could reasonably be expected to frustrate the deliberative process of the Competition Commission

MRTP/ Competition Laws

The initial complaint was submitted to the Commission by Mr Parsons ("the Parsons complaint") wherein he alleged that the tyre manufacturers simultaneously announced price increases by using sales tactics, marketing structures and pricing techniques to disguise their price fixing. This led to the Commission conducting a search and seizure on the premises of Apollo Tyres South Africa (Pty) Ltd ("Apollo''), Bridgestone South Africa (Pty) Ltd ("Bridgestone") and the South African Tyre Manufacturers' Conference (Pty) Ltd ("SATMC") on 4 April 2008 ("dawn raid").

The Competition Tribunal of South Africa ("the Tribunal") heard two applications brought by Goodyear South Africa (Pty) Ltd ("Goodyear") and Continental Tyres South Africa (Pty) Ltd ("Continental"). The purpose of Goodyear's application was to compel the Competition Commission ("the Commission") to make 'further and better discovery' in relation to documents that formed part of the Commission's record.' Continental's application was to compel the Commission to produce certain documents forming part of the Commission's record. The Commission resists handing over these documents on the basis that, they are protected from disclosure by litigation privilege and under Commission Rule 14(1)(d) and (e).

For a document to be protected under Commission rule 14(1)(d), there is no requirement that it be produced or procured in contemplation of litigation. Thus, in Rule 14(1)(d)(i)(cc), a document that contains an account of a consultation, discussion or deliberation that has occurred including but not limited to minutes of a meeting for the "purpose of assisting to formulate a policy or take a decision in the exercise of a power or performance or duty conferred or imposed on the Commission by law". In Rule 14(1)(d)(ii), the documents listed in the two sub-rules are protected, if disclosure "could reasonably be expected to frustrate the deliberative processes of the Commission by inhibiting the candid' communications of an opinion, advice or report or recommendation or conduct of a consultation, discussion or deliberation. The primary purpose of litigation privilege is to protect communications between parties produced or procured in contemplation of litigation.

Rule 14(1) has been specifically promulgated to provide a far wider net of protection than what would ordinarily be available to the Commission under the common law principle of litigation privilege. Rule 14(1) recognises that the Commission, a public body, tasked with the responsibility of enforcing the Competition Act would require that its processes, documents and consultations be restricted from disclosure, either for a limited period of time (as in 14(1)(c)) or because of the nature of the communication/document/discussion as provided in rule 14(1)(d). The protection afforded by Rule 14(1)(d) is not however absolute and can in certain circumstances be lifted by this Tribunal in terms of Commission Rule 15. In present case, the dawn raid is a clear indication that the Commission, after an initial period of investigation following on from Parson's complaint, had contemplated litigation against the Respondents. Rule 14(1)(d) (ii)(bb) provides that a document is restricted information if the disclosure of which could reasonably be expected to frustrate the deliberative process of the Competition Commission by inhibiting the candid (bb) conduct of a consultation, discussion or deliberation."

The Rule does not apply to the internal communications between officials of the Commission (that is already provided for in (i)(aa)) nor does it require that, the Commission should have generated the document. Hence, it could apply to consultations involving third parties and to documents that the Commission may have generated itself or obtained through other means, Sub-rule (bb) however provides the ambit of the rule — it is not just any document that is restricted but one whose disclosure could reasonably be expected to frustrate the "deliberative process of the Commission by inhibiting the candid conduct of a consultation, discussion or deliberation". Thus, at the level of principle, the rule seeks to enhance the candid exchange of views between participants in a consultation or discussion, by protecting documents that may be relevant to that consultation or discussion or deliberation.

The deliberative process of the Commission does not consist of one singular linear process from start to finish. The Commission's process does not consist of one decision from initiation to referral. It consists of many decisions made along the way where it might be required to evaluate issues, assess evidence, decide whether or not to follow a particular direction in its investigation, to narrow its ambit, to expand its scope or make any other type of decision related to the performance of its functions. Although, the Commission has not provided further particularity of dates, given the nature of these communications in the context of the facts of this case, the documents undoubtedly fall within the category contemplated within rule 14(1)(d)(ii) and are to be considered as restricted information within the meaning of that sub-rule.

The transcripts in dispute relate to all consultations held by the Commission in the course of its investigations with persons knowledgeable about the industry and included employees of the tyre manufacturers. Nevertheless it is important to note that the Commission's s49A interviews are a critical mechanism for the gathering of evidence and insights into a particular industry. The interviews are usually conducted by investigators assisted by the Commission's legal division. In order for the mechanism to be deployed effectively and for the Commission to utilise its resources gainfully, it is necessary that the officials of the Commission should not feel inhibited by the fear of disclosure to obtain, by lawful means, from third parties as much information as they could possibly garner. Likewise third parties who are summoned should feel assured that their discussions and revelations can be candid without fear of disclosure. The candid exchange of views between Commission officials and third parties is highly relevant to the quality of information that the Commission would require for the deliberative processes of the Commission. If the comfort of protection is not given to these consultations or discussions, third parties might feel constrained to such an extent that the interviews would amount to a waste of public resources. The Commission on the other hand would not be placed in a position to evaluate the evidence it has gathered to date or to make decisions about whether or not it should embark on further action.

These transcripts would also constitute documents contemplated in rule 14(1)(d)(ii)(bb) and would amount to restricted information, In relation to the Wustmann transcript the principle of fairness dictates that the Wustmann transcript must be handed over to all the remaining respondents' legal representatives. Goodyear's and Continental's application dismissed. The Commission must hand over copies of the Wustmann transcript dated 2nd March 2010 to the legal representatives of Goodyear and SATMC subject to the furnishing of appropriate confidentiality undertakings.

Tags : LITIGATION PRIVILEGE DOCUMENTS DISCLOSURE PROTECTION