The ruling may point to a trend that English courts are ever more willing to intervene in managing confidentiality rings.
In Infederation Limited v Google LLC and others the English High Court considered the extent to which confidential information should be protected from disclosure in competition proceedings. In a somewhat novel approach, Mr. Justice Roth gave the defendants a choice: they could either amend their case so that they no longer relied on the confidential information, or the claimant’s expert witness could be admitted into the relevant confidentiality rings, allowing him to see the confidential information.
The High Court also provided important guidance on making claims for confidentiality and commented on the prevalence of excessive confidentiality claims in competition proceedings.
The claimant, Infederation Limited, also known as Foundem, operates a vertical search engine (i.e., one that operates in a specific segment of online content) that allows consumers to compare prices for goods and services offered on third-party websites. Foundem alleges that the defendants, Google LLC (formerly, Google Inc.), Google Ireland Limited, and Google UK Limited, abused their dominant position in the horizontal search-engine market (i.e., one that operates across the entire internet), contrary to Article 102 of the Treaty on the Functioning of the European Union (TFEU) and section 18 of the Competition Act 1998, which caused Foundem loss.
Foundem had previously complained about Google LLC’s alleged abusive conduct to the European Commission (the Commission) under separate, parallel European Union proceedings. The Commission adopted a decision in June 2017, finding that Google LLC had infringed Article 102 of the TFEU by displaying more favourably, in its search results, its own comparison shopping service compared to competing comparison shopping services. The infringement was found to have commenced in January 2008. Google LLC has appealed the decision to the EU General Court.
Foundem’s claim is therefore a hybrid claim: it is part standalone, alleging further grounds of infringement, and part follow-on (i.e., it relies in part on the Commission’s decision).
The defendants applied to strike out the standalone elements of Foundem’s claim. As part of that application, the defendants relied on technical evidence, which in particular discussed Google’s search algorithms (their “Crown Jewels”). Foundem subsequently applied to the High Court for the admission of an independent expert, a search engine optimisation (SEO) consultant, to two inner confidentiality rings. The purpose of this was to allow the expert to consider the technical evidence from Google, which would allow Foundem to be in a position meaningfully to make submissions on that evidence.
Three confidentiality rings had previously been ordered by the High Court, each of which had a different membership, affording different levels of protection to confidential information. The first included named individuals from each party, external solicitors, counsel, and experts; the second (referred to as the LEO (legal eyes only) ring), included external solicitors, counsel, and economic experts; and the third was a more restricted inner confidentiality ring (referred to as the RLEO ring), that compromised external solicitors and counsel only.
The defendants agreed to admit the SEO consultant to the first confidentiality ring but refused to agree admission to the LEO and RLEO rings on the basis that sensitive information would be disclosed to the industry. The defendants also argued that “it is difficult to see how someone working in the online search and search optimisation industry or advising in the area of online advertising could avoid even unconsciously relying upon it”.
The High Court acknowledged the defendants’ concerns and noted that confidentiality rings are often essential in intellectual property cases. In addition, the High Court recognised, in the context of the SEO consultant, that “once information has been acquired, it is inevitably difficult not to use it in another context”. In light of the above, Mr. Justice Roth stated that, should he order that the SEO consultant be admitted into the LEO and RLEO confidentiality rings, he would require the SEO consultant to provide enhanced confidentiality ring undertakings to the Court. Mr. Justice Roth reasoned that this would afford the defendants additional protection and alleviate their concerns as regards the disclosure of sensitive information. The undertaking would require the SEO consultant to consent to the jurisdiction of the English courts (as he is based in Germany) for the purposes of enforcement.
However, before making such an order, the Court gave the defendants a choice: The defendants, for their pending strike out application, could renounce reliance on the evidence that relied on the LEO and RLEO documents, thereby removing the need for the SEO consultant to be admitted to the LEO and RLEO confidentiality rings. However, the defendants would not be permitted to put forward alternative evidence. Alternatively, the SEO expert could be admitted to the LEO and RLEO confidentiality rings on the enhanced terms mentioned above.
Mr. Justice Roth also recognised that while certain sensitive information may merit protection by way of a confidentiality ring, such arrangements:
- Are exceptional
- Must be limited to the narrowest extent possible
- Require careful scrutiny by the Court to ensure that there is no resulting unfairness
In addition, Mr. Justice Roth noted that any dispute over admission of an individual to the confidentiality ring must be determined on the particular circumstances of the case. In this case, the Court found that the interests of the administration of justice and Foundem’s right to a fair hearing must prevail.
Importantly, the Court stated that the decision as to whether confidentiality should be claimed for a document ultimately rests with the client but could be subject to scrutiny by the courts. Further, the Court provided guidance to solicitors stating that “they should not necessarily be satisfied by their client’s view that open inspection of a document should be restricted on confidentiality grounds”.
The decision is a helpful reminder to solicitors of their obligations when considering the confidentiality of documents. It provides practical advice, namely that 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. Mr. Justice Roth explained that solicitors should advise their clients as to the proper limits of confidentiality, given the protection for all disclosed documents under CPR rule 31.22, which states that a party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it was disclosed.
Additionally, Mr. Justice Roth observed 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”. He concluded that this “is not the way modern litigation should be conducted”. His words should be considered a stark warning for practitioners and clients alike. They may also point to a trend that the courts are ever more willing to intervene in managing confidentiality rings. Legal advisers should therefore be cautious when considering the confidentiality of documents and be in a position to defend any confidentiality claims.
This post was prepared with the assistance of Nootan Vegad in the London office of Latham & Watkins.
  EWHC 657 (Ch)