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The Paris Court of Appeal condemns the FCA for violating Google’s business secrets


On June 16, 2022, the Paris Court of Appeals (the “Court”) ruled that “decisions to protect the confidentiality of business secrets taken during the course of the investigation, which have not been challenged pursuant to Article R. 463-15 of the French Commercial Code, continue to bind the College when adopting and drafting the decision on the merits, otherwise such decisions would be deprived of any effectiveness” (the “Ruling”).[1]

Background

In the context of an investigation carried out by the French Competition Authority (the “FCA”), Google obtained from the head of the FCA’s investigatory services, the Rapporteur Général, that its business secrets be kept confidential.[2] Later in the investigation, the FCA issued a decision imposing interim measure on Google and published a non-confidential version of the decision.[3]

However, the non-confidential decision disclosed certain information that had been classified as confidential. Google requested from the Paris Court of Appeals the annulment of the FCA’s decision of publication.

Google claimed that the FCA could not disclose information which had been classified as confidential during the course of the investigation, and should at least have offered Google the opportunity to express its views on the declassification request pursuant to the procedure provided for in the French Commercial Code.

From the FCA’s point of view, the procedure allowing parties to have their business secrets protected only applied during the investigation, but not at the publication stage. The FCA did not consider itself bound by the Rapporteur Général’s decision to keep certain information confidential when adopting its decision on the merits, and considered that the objective of informing the general public prevailed on the parties’ right to have their business secrets kept confidential.

Court jurisdiction to rule on decision to publish business secrets

Incidentally, the Court, which normally has jurisdiction over matters relating to the substance of decisions taken by the FCA, initially declined jurisdiction to rule on the matter. Google then seized the Conseil d’Etat, which referred the case to the Tribunal des Conflits to rule on jurisdiction. On October 5, 2020, the Tribunal ruled that “the decision taken by the French Competition Authority, on the basis of the aforementioned provisions of Article D.464-8-1[4] of the French Commercial Code, to limit or not to limit the publicity of a decision taken on the basis of Article L.464-1[5] of the French Commercial Code is not severable from this decision itself. Consequently, any appeal in that respect is also a matter for the Paris Court of Appeal”.[6]

The mechanism for the protection of business secrets applies to the publicity of the decision

The Court first laid down the procedure provided for in the French commercial Code which enables a party to have its business secrets kept confidential under certain conditions. The French commercial Code sets out (i) the kind of information that can be claimed to constitute confidential business secrets,[7] (ii) the cases where the confidentiality afforded to such business secrets may be lifted,[8] (iii) the modalities for doing so[9] and (iv) the possibility of an appeal.[10]

The Court also noted that the right for a party to have its business secrets kept confidential is enshrined in Directive (EU) 2016/943 of the European Parliament and of the Council of June 8, 2016, on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.

In light of the fact that the right for a party to have its business secrets kept confidential is inherent to its rights of defence, the Court found that “a decision allowing business secrets to be kept confidential during the investigation, which has not been challenged and reversed by a decision deciding to lift confidentiality pursuant to Article R.463-15 of the French Commercial Code, continues to bind the Collège at the stage of adopting a decision, unless the confidentiality thus granted is largely deprived of its useful effect”.[11]

Furthermore, the Court clarified that even assuming that the FCA could decide that the public interest at stake justifies lifting confidentiality, the FCA was required consult the parties in advance and provide the reasons for its decision.[12]

As a result, the Court found that the FCA had violated Google’s business secrets and ordered the FCA to pull and republish an appropriately redacted decision, which the FCA did two weeks after the ruling.


[1]      Paragraph 35 of the Ruling (free translation).

[2]      Decisions no. 18-DSA-442 of December 6, 2018 and no. 19-DSA-023 of January 14, 2019.

[3]      Decision no. 19-MC-01 imposing interim measures.

[4]      “The decisions of the Competition Authority referred to in Article L. 470-7-1 are published on the Authority’s website. Their publication may be restricted to take into account the legitimate interest of the parties and the persons cited in not disclosing their business secrets”.

[5]      “The Competition Authority may, at the request of the Minister in charge of the economy, of the persons mentioned in the last paragraph of Article L. 462-1 or of the companies, or on its own initiative and after having heard the parties in question and the Government Commissioner, take the precautionary measures which are requested or which appear necessary”.

[6]      Paragraph 12 of the Ruling (free translation).

[7]      Article L.151-1 of the French commercial Code.

[8]      Article L.463-4 of the French commercial Code.

[9]      Articles R.463-14 and R.463-15 of the French commercial Code.

[10]    Article L.464-8-1 of the French commercial Code.

[11]    Paragraph 35 of the Ruling (free translation).

[12]    Paragraph 41 of the Ruling.



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