62003TO0289_EN
Parties
Grounds
Operative part
Parties
In Case T-289/03,
British United Provident Association Ltd (BUPA),
established in London (United Kingdom),
BUPA Insurance Ltd, established in London,
and
BUPA Ireland Ltd, established in Dublin (Ireland),
represented by N. Green QC, K. Bacon and J. Burke, Barristers, and B. Amory, lawyer,
applicants,
v
Commission of the European Communities, represented initially by J. Flett and subsequently by N. Khan, acting as Agents, with an address for service in Luxembourg,
defendant,
supported by
Kingdom of the Netherlands, represented by N. Bel, acting as Agent,
Ireland, represented by D. O’Hagan, acting as Agent, assisted by G. Hogan SC and E. Regan, Barrister, with an address for service in Luxembourg,
and
Voluntary Health Insurance Board (VHI), established in Dublin, represented by D. Collins, G. FitzGerald and D. Clarke, solicitors,
interveners,
APPLICATION for the annulment of Commission Decision C(2003)1322 final of 13 May 2003, concerning a risk equalisation scheme in the Irish health insurance market (State Aid case N 46/2003-Ireland),
THE PRESIDENT OF THE THIRD CHAMBER (EXTENDED COMPOSITION) OF THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES
Registrar: H. Jung,
makes the following
Order
Grounds
Facts and procedure
1. By application lodged at the Registry of the Court of First Instance on 20 August 2003, the applicants brought an action for the annulment of Commission Decision C(2003)1322 final concerning a risk equalisation scheme (‘RES’) in the Irish health insurance market (State Aid case N 46/2003-Ireland).
2. By that measure, the Commission decided not to raise any objections to the RES, taking the view that it did not contain any elements of State aid within the meaning of Article 87(l) EC. The contested decision shows that the scheme essentially provides for a system of parafiscal taxes designed to harmonise the level of risk encountered by operators in the complementary health insurance market, liberalised in Ireland since the beginning of the 1990s.
3. By documents lodged at the Registry of the Court of First Instance on 27 November, 12 December and 17 December 2003, Ireland, the Kingdom of the Netherlands and the Voluntary Health Insurance Board (‘the VHI’) applied for leave to intervene in these proceedings in support of the defendant. The applications to intervene were notified to the applicants and the defendant.
4. By letters of 4 December 2003 and 22 January 2004, the defendant stated that it had neither any observations nor any request for confidential treatment with regard to the intervention of Ireland and the Kingdom of the Netherlands. By letter of 7 January 2004, the defendant told the Court of First Instance that it considered that the VHI should be allowed to intervene and that there was no need to exclude anything from the file in relation to that party.
5. By letters of 5 January and 22 January 2004, the applicants stated that they had no observations concerning the applications to intervene by Ireland and the Kingdom of the Netherlands. By letter of 3 February 2004, however, the applicants contended that the application of the VHI to intervene should be dismissed.
6. By separate documents lodged at the Registry of the Court of First Instance on 5 January, 22 January and 3 February 2004, the applicants made an application under Article 116(2) of the Rules of Procedure for confidential treatment vis-à-vis the three interveners in relation to certain information contained in the application including its annexes, the content of those applications being, essentially, identical.
7. By orders of 3 February and 2 April 2004 (order of the President of the Third Chamber (Extended Composition) of the Court of First Instance of 2 April 2004 in Case T‑289/03 BUPA and Others
v Commission, not published in the ECR) the President of the Third Chamber, Extended Composition, of the Court of First Instance respectively allowed, first, Ireland and the Kingdom of the Netherlands and, secondly, the VHI to intervene in these proceedings in support of the defendant. The President further ordered that the interveners be set a time-limit within which to submit any observations they might have on the applications for confidential treatment and reserved a decision on their merits (paragraph 3 of the operative part of the respective orders).
8. By letters of 5 April 2004, the Registrar of the Court of First Instance served upon each of the interveners, inter alia, the non-confidential version of the application and its annexes and invited them to submit by 28 April 2004 any objections they might have in relation to the applications for confidential treatment of the information provisionally excluded.
9. By letter of 27 April 2004, the VHI informed the Court of First Instance, in relation to the application for confidential treatment brought by the applicants in its regard, that it had no objection to the documents concerned being excluded from the file. The Kingdom of the Netherlands did not react to the letter from the Registrar of the Court of First Instance of 5 April 2004.
10. By letter of 28 April 2004, Ireland expressed objections concerning the application for confidential treatment formed by the applicants, and asked the Court of First Instance to send it a complete set of all the procedural documents.
The applications for confidential treatment
11. The VHI and the Kingdom of the Netherlands have refrained, either expressly or tacitly, from challenging the exclusion of certain information from the file in relation to them. There is therefore no further need to rule, by way of an order, as to whether the applicants’ applications for confidential treatment in their regard are well founded. This order will therefore be confined to examining the application for confidential treatment raised in respect of Ireland.
12. The applicants apply for confidential treatment vis-à-vis Ireland of certain passages in their application and its annexes, which, they maintain, contain confidential information and sensitive business secrets, particularly vis-à-vis their sole competitor, the VHI. They consider that those passages should be excluded from the file to be sent to Ireland because they contain:
– details of confidential discussions with the Health Insurance Authority (‘the HIA’), the Irish authority entrusted under the Health Insurance Acts 1994-2003 with certain supervisory and executive powers, and with advising the Irish Government in connection with national legislation on private sickness insurances,
– information based on an estimate of charges potentially incurred by BUPA Ireland on account of the RES by reference to the profits of its operations in Ireland,
– information revealing the possibility of BUPA Ireland having to leave the Irish market and its probable commercial strategy following the implementation of the RES.
13. According to the applicants, the particular passages in question are the following:
– The whole of paragraph 11 of the application, pages 6 to 7;
– The last sentence of the first paragraph of the summary of the application, page 58;
– The last sentence of paragraph 150 of the application, page 44;
– The section of paragraph 94 beginning with ‘To that end, …’ and ending with ‘cost of claims’, and paragraphs 95 and 96 of the witness statement of Mr Martin O’Rourke, Annex 22 to the application, pages 1392 and 1393;
– The last sentence of paragraph 99 of Mr O’Rourke’s witness statement, page 1394;
– The first indent of section 4.5 of the report of Nera Economic Consulting (‘the NERA report’) beginning with ‘Impact on BUPA ...’ and ending with ‘monopoly provider’, Annex 23 to the application, page 1425;
– The last sentence of the second indent of section 4.5 of the NERA report beginning with ‘Like BUPA ...’ and ending with ‘the Irish market’, page 1425;
– The last sentence of section 4.6 of the NERA report, beginning with ‘In meetings ...’ and ending with ‘cost of claims’, page 1427;
– The part of section 5.2 of the NERA report beginning with ‘Foreign PMI providers ...’ and ending with ‘efficient competitor of the VHIB’, a quotation from the witness statement of Mr O’Rourke, page 1430.
14. The applicants further request confidential treatment of tables 2.1 and 2.2 of the NERA report, page 1404, on the ground that they contain details concerning BUPA Ireland’s revenue and claims frequency.
15. Ireland does not accept that the information contained in the above documents is of an essentially sensitive or confidential nature from the commercial point of view. It further maintains that access to that information is essential for it to be able effectively to state its point of view on the essential questions raised by the present dispute and to refute the allegations of the applicants.
16. First, concerning the ‘likely’ commercial strategy of BUPA Ireland in response to the implementation of the RES, Ireland argues that that strategy, being uncertain and dependent on a future decision of BUPA Ireland, cannot constitute a confidential element. Moreover, the applicants did not make an application for confidential treatment in relation to the defence, paragraph 16 of which refers to a position adopted on that subject. Finally, Ireland argues, the impact of the RES on the applicants’ business has already been widely reported upon, following public statements by the applicants themselves, in the Irish media, such as in articles in the Irish Independent, of 24 June 2002, in the Irish Medical News, of 29 October 2002, and in the press release of BUPA Ireland itself, of 30 June 2003, published on its internet site.
17. Secondly, concerning the alleged confidentiality of BUPA Ireland’s profits, Ireland argues that certain figures relating to its financial results were already divulged by the communication to the interveners of paragraph 16 of the Commission’s defence, which the applicants did not oppose. Ireland further considers that access to only the revenue figures of BUPA Ireland, in the absence of information on its outgoings including claims and administrative costs, would in any event not be sufficient, given that the profitability of BUPA Ireland and, even more, its claims history, are essential factors in the present case. More particularly concerning Annex 23 to the application (p. 1404), that is to say tables 2.1 and 2.2 of the NERA report, Ireland argues that the profits of BUPA Ireland have already been communicated to the Irish authorities.
18. Thirdly, concerning BUPA Ireland’s estimates of the potential magnitude of its liability after the implementation of the RES, Ireland points out that the latter have already been revealed on the internet site www.bupaireland.ie//whatsnew/papers
and published in an article in the Sunday Business Post
of 18 January 2004. Moreover, given that the substance of the present dispute concerns questions such as the proportionality of the RES and its impact on competition, the interveners must at least have access to the limited financial information about BUPA Ireland as set out in the application.
19. Finally, concerning the information which formed the subject-matter of discussions between BUPA Ireland and the HIA, Ireland argues that that information has already been made public in the press or in the defence, and does not therefore call for special protection. Moreover, making information accessible concerning BUPA Ireland’s previous discussions with the HIA has no bearing on the candour of any future discussions which BUPA Ireland might have with it.
20. Ireland concludes that the information covered by the request for confidential treatment should be communicated to it in its entirety.
21. Article 116(2) of the Rules of Procedure provides:
‘If an intervention for which application has been made within the period of six weeks prescribed in Article 115(1) is allowed, the intervener shall receive a copy of every document served on the parties. The President may, however, on application by one of the parties, omit secret or confidential documents.’
22. The first sentence of Article 116(2) of the Rules of Procedure thus lays down the principle that interveners are to receive a copy of every document served on the parties. It is only by way of derogation from that principle that the second sentence of that provision enables the Court to make certain documents in the case the subject of confidential treatment and thus to exclude them from the obligation of communication to the interveners (order of the Court of First Instance in Case T-30/89 Hilti
v Commission
[1990] ECR II-163, publication by extracts, paragraph 10).
23. For the purpose of determining the conditions under which recourse may be had to that derogation, it is necessary to balance, in respect of each document or passage of a document on the Court’s file for which confidential treatment is claimed, the applicant’s legitimate concern to prevent substantial damage to its business interests and the interveners’ equally legitimate concern to have the necessary information for the purpose of being fully in a position to assert their rights and to state their case before the Court (see, for example, Hilti, paragraph 11; order in Case T-66/94 Auditel
v Commission
[1995] ECR II-239, paragraph 31; order in Case T-102/96 Gencor
v Commission
[1997] ECR II-879, paragraph 12).
24. It has also been consistently held that, as a general rule, an application for the confidential treatment of information which contains business secrets should be upheld (see, for example, order in Joined Cases T-7/93 R and T‑9/93 R Langnese Iglo
v Commission
[1993] ECR II-131, paragraph 15; order in Case T-74/97 Büchel & Co. Fahrzeugteilefabrik
v Council, not published in the ECR, paragraph 8).
25. Furthermore, a derogation from the principle set out in the first sentence of Article 116(2) of the Rules of Procedure can be made only after an examination of the confidentiality or otherwise of each document on the file for which an application for confidential treatment, duly reasoned, has been submitted. It is particularly in order to allow such an examination that the first paragraph of Article 5(4) of the Instructions to the registrar of the Court of First Instance of 3 March 1994 (OJ 1994 L 78, p. 32, last amended on 5 June 2002 (OJ 2002 L 160, p. 1)) provides that a party’s application for the confidential treatment of certain information on the file must specify the confidential matters or passages and ex plain why they are confidential (order in Case T-168/01 Glaxo Wellcome
v Commission, not published in the ECR, paragraphs 36 and 37).
26. The Court must therefore first examine whether the matters in respect of which confidential treatment is requested are capable of being classified as business secrets or other confidential information vis-à-vis Ireland. Only if that is so will it be necessary to balance the legitimate interests of the parties to the proceedings in accordance with the principles set out above.
The alleged confidentiality of the discussions with the HIA and the information concerning the business of BUPA Ireland
27. Since the discussions between BUPA Ireland and the HIA, as described in the application and its annexes, refer in particular to information concerning the business of BUPA Ireland and the effects which a possible introduction of the RES would have on that business, these two aspects of the request for confidential treatment should be considered together.
28. Concerning the alleged confidentiality and the alleged need to ensure the candour of discussions between BUPA Ireland and the HIA, it should be noted by way of preliminary observation that the HIA is an Irish authority, established under the Health Insurance Acts 1994-2003, entrusted by the national legislature with certain powers of supervising and applying the national provisions governing private health insurance and with the role of adviser to the Irish Government on the matter. It is also undisputed that, in accordance with the national legislation referred to above, the HIA has specific powers concerning the introduction and implementation of the RES. That comprises its duty to gather, evaluate and communicate to the relevant minister, in the form of a report, all the essential facts relating to the functioning of the private health insurance market in order to judge the relevance of introducing the RES. In addition, as is shown in particular by the passages of the application in respect of which the applicants ask the Court of First Instance for confidential treatment vis-à-vis Ireland, it is precisely in the context of exercising those regulatory and administrative functions, namely the possible introduction of the RES, that the HIA has held informal meetings with BUPA Ireland in order to discuss the impact of the new system on the latter.
29. Since the HIA, as a State authority, is responsible vis-à-vis Ireland for the sound administration of the national legislation in question, it follows from the above that neither the existence as such of informal contacts with the HIA, nor the information supplied on that occasion by BUPA Ireland concerning the possible consequences which implementation of the RES might have for it can be regarded as confidential matters vis-à-vis Ireland.
30. Moreover, it is apparent from the application for confidential treatment with regard to Ireland, which is broadly identical to the applications concerning the VHI and the Kingdom of the Netherlands, that the applicants are seeking to protect the confidentiality of certain matters on the file particularly vis-à-vis the VHI, their only competitor in the Irish private health insurance market, rather than with regard to Ireland itself.
31. As the President of the Third Chamber, Extended Composition, of the Court of First Instance has already stated in his order in this case of 2 April 2004 (see paragraph 7 above), it is true that statutory links exist between the Irish State and the VHI in that, in particular, the Irish health minister has a decisive influence on the composition of its board and may require from it any information in connection with its activities. One cannot therefore exclude a certain alignment of the general management of the VHI with the political guidance issued by the competent Irish minister and, as a consequence, a certain concordance of the general positions between the VHI and Ireland. Nevertheless, that provides no ground for inferring that the respective interventions in these proceedings by Ireland and the VHI are necessarily perfectly in accord with each other (see order in BUPA
v Commission, paragraph 9), and that, therefore, the interveners are likely to exchange between themselves, in that regard, any information, even if confidential, concerning the case in hand. Moreover, apart from the fact that the VHI constitutes a body under a certain amount of control by the Irish State, the applicants have not provided any relevant evidence to support the conclusion that the VHI or its board would be able to have access to sensitive information which might be communicated to Ireland in the context of this case.
32. It should be added in that respect that, if the interveners did exchange certain information which, after challenge by the opposing party, had been communicated to them by the Court of First Instance on an individual basis and solely for the purposes of defending their own legitimate interests in the present proceedings, that would, in any event, be inadmissible and constitute a serious undermining of the requirements of the sound administration of justice and, to the extent that a Member State was involved, constitute a breach of the duty of loyalty under Article 10 EC.
33. Therefore, the application for confidential treatment of the passages revealing the content of discussions between BUPA Ireland and the HIA, including the information concerning BUPA Ireland’s business and communicated by the latter to the HIA at those meetings, must be dismissed. It is therefore not necessary to rule as to whether some of that information has in any event already lost its confidentiality following publication in the Irish media and the mentioning of that information by the Commission in its defence, paragraph 16, the communication of which to Ireland the applicants did not oppose.
The alleged confidentiality of the information concerning the possibility of BUPA Ireland having to leave the Irish market and concerning its likely commercial strategy after the implementation of the RES
34. Concerning the alleged danger of BUPA Ireland having to leave the Irish market after the introduction of the RES, Ireland has rightly argued that that risk has been widely reported in the Irish media, notably at the instigation of BUPA Ireland itself, as is confirmed by articles which appeared in the Irish Independent
on 24 June 2002 and the Irish Medical News
on 29 October 2002. In fact, the relevant passages in the application and its annexes essentially accord, in their substance, with the statements reproduced in the Irish press. Those statements have therefore lost their confidentiality in any event, and no longer warrant specific protection by the Court of First Instance. The same applies to the applicants’ statements as to their envisaged commercial strategy after the introduction of the RES, since that strategy consists precisely in the possibility of leaving the Irish market.
35. Therefore, the applications for confidential treatment of the statements concerning the risk of BUPA Ireland having to leave the Irish market and its likely commercial strategy after the implementation of the RES must be dismissed.
The alleged confidentiality of the information contained in tables 2.1 and 2.2 of the NERA report
36. Concerning the information reproduced in tables 2.1 and 2.2 of the NERA report, the applicants essentially maintain that it falls within the category of ‘extensive information of an operational nature’, including details concerning BUPA’s revenues and claims frequency, the divulging of which, ‘taken with other information’ might allow its profitability to be estimated.
37. As a preliminary remark, it should be noted that it is not clear from the documents on file whether the information contained in the abovementioned tables has already formed the subject-matter of exchanges of views between BUPA Ireland and the HIA, in which case they would in any event have lost their confidentiality vis-à-vis Ireland (see above, paragraph 26 et seq.). Further, it cannot be denied that the data treated by NERA in those tables fall within the commercial activity of BUPA Ireland on the Irish private health insurance market, and are therefore capable in principle of constituting business secrets.
38. However, it is clear that those tables contain only aggregate data, reproduced in the form of graphs, concerning BUPA Ireland’s commercial activities in 2002, such as the average age of persons insured with BUPA Ireland, the premiums paid for ‘BUPA plans’ and the frequency of claims. The applicants have not conclusively established how, on the basis of those aggregate data, which are, moreover, of a certain age, it is conceivable that a third party might deduce concrete information, harmful to their commercial interests, as to the turnover, accounts and, finally, current profitability of BUPA Ireland (see also the order of the Court of First Instance of 19 June 1996 in Joined Cases T-134/94, T-136/94, T-137/94, T-138/94, T-141/94, T-145/94, T-147/94, T-148/94, T-151/94, T‑156/94 and T-157/94 NMH Stahlwerke and Others
v Commission
[1996] ECR II-537, paragraph 24). Nor, finally, have the applicants explained to what extent the combining of that information ‘taken with other information’, the possible content of which they do not specify, might enable a third party to reconstitute the profitability of BUPA Ireland’s current commercial activity.
39. In those circumstances, the applicants’ request to exclude tables 2.1 and 2.2 of the NERA report from the file documents to be communicated to Ireland must be dismissed. As regards the argument by Ireland that even wider access to information concerning BUPA Ireland’s economic performance is necessary for the purposes of these proceedings, that argument clearly has no connection with the application for confidential treatment that is the subject-matter of this order, and cannot therefore be accepted.
Costs
40. Costs are reserved.
On those grounds,
THE PRESIDENT OF THE THIRD CHAMBER (EXTENDED COMPOSITION) OF THE COURT OF FIRST INSTANCE
Operative part
hereby orders:
1. There is no need to rule on the merits of the applicants’ applications for confidential treatment of 22 January and 3 February 2004 in relation to the Kingdom of the Netherlands and the VHI.
2. The applicants’ application for confidential treatment in relation to Ireland is rejected.
3. A complete set of the procedural documents, as communicated by the applicants to the Court of First Instance, shall be served, under the authority of the registrar, on Ireland.
4. The interveners will be set a time-limit, under the authority of the registrar, for the submission of a statement in intervention.
5. Costs are reserved.
Luxembourg, 4 March 2005.