Australian Competition and Consumer Commission v Reckitt Benckiser [2016] FCA 355 | Case summary

EDELMAN J: 1 This is an application by Reckitt Benckiser for confidentiality orders. The Australian Competition and Consumer Commission (ACCC) does not oppose the application. The parties sought to have the application determined on the papers prior to the penalty hearing. I am satisfied that the orders sought should be made. These are my reasons. 2 Reckitt Benckiser relies upon s 37AF of the Federal Court of Australia Act 1976 (Cth) for the confidentiality orders sought. It submits that the orders are necessary to prevent prejudice to the proper administration of justice (see s 37AG(1)(a)). 3 The terms of the proposed orders are similar to those that I made in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 3) [2015] FCA 1406. That application formulated the proposed orders in a tailored manner to avoid concerns that I had expressed earlier in a third party application: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 2) [2015] FCA 1274. The orders are also appropriately tailored in this application. 4 In Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 3), which was decided prior to the trial of liability, the confidentiality orders that I made concerned documents that related to Reckitt Benckiser's marketing initiatives and objectives for product lines, and commercially sensitive pricing strategies and product pricing information. As I observed in my decision on that application, the marketing initiatives and pricing strategies were developed in a highly competitive market where Reckitt Benckiser sought, and seeks, to maximise profit including by its product differentiation. However, confidentiality is not, of itself, sufficient for an order based upon s 37AG(1)(a) of the Federal Court of Australia Act. In Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651, 666 [38], a joint judgment of the High Court quoted the following passage which is applicable to s 37AF of the Federal Court of Australia Act: the question will always be: is an order necessary to prevent prejudice to the administration of justice? Absent an affirmative answer to this question it is … almost meaningless to propose that documents themselves are, or that the information in them is, inherently confidential to an extent justifying, or assisting in the justification of, the making of an order permanently protecting them from public view. 5 This application, which is now made in relation to documents before the Court for the penalty hearing, relies upon confidentiality concerns in relation to trade rivals as the basis for the orders sought. Reckitt Benckiser again relies on the notion that this Court should not willingly permit the disclosure of information in a manner in which the litigation could "become a vehicle for advantaging or prejudicing trade rivals": Australian Competition & Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278 [148] (Katzmann J); Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 [23] (Greenwood J). Reckitt Benckiser also relies on the unquantifiable damage that the release of the confidential information could cause to its relationships with its customers. 6 An affidavit from Reckitt Benckiser's legal director for Australia and New Zealand describes the high level of competition in the market for consumer health care products. Reckitt Benckiser's customers in that market include supermarkets and pharmacies. It competes on price and by product differentiation. 7 In broad terms, the confidential information upon which Reckitt Benckiser relies involves: (1) the number of units and wholesale prices of Nurofen Specific Pain Range products sold between 2011 and 2015; (2) the proportion of Reckitt Benckiser's revenue comprised by those sales between 2011 and 2015; (3) the proportion of Reckitt Benckiser's revenue, profit (including reporting practices) comprised by those sales between 2011 and 2015; and (4) marketing initiatives, business and sales strategies relating to new and existing product lines and discounts and support offered to retailers. 8 As between Reckitt Benckiser and the ACCC, the propositions in [5] above can be accepted as matters which, without a confidentiality regime ordered by the Court, could prejudice the proper administration of justice. However, it is important to emphasise two matters. 9 The first matter to emphasise is that there was no evidence that, prior to this application, Reckitt Benckiser had sought undertakings from the ACCC in the form which will be embodied in orders of this Court. I am prepared to draw that inference in this case in circumstances in which Reckitt Benckiser is well aware of its obligations under ss 37N(1) and 37M of the Federal Court of Australia Act. But nothing in these reasons should be taken to suggest that it would be appropriate for an applicant to seek confidentiality orders of the type sought by Reckitt Benckiser without first attempting to reach agreement with an applicant about a similar regime for non-disclosure by the offer of private undertakings. It may be appropriate, given the not infrequent nature of these applications, that the ACCC develop a standard form of an undertaking which could be adapted to particular cases to preserve confidential material of a respondent without increasing the time and distraction to the parties with applications of this type before liability and penalty hearings. 10 The second matter is that my acceptance of the propositions in [5] above does not mean that my reasons for decision concerning penalty should omit reference to, or redact, confidential material upon which the ACCC relies. The importance of transparency of decision making, coupled with the prime consideration of deterrence and the need for cases to be decided consistently, are matters which may militate in favour of inclusion of confidential material even if that material would cause prejudice to Reckitt Benckiser. Nevertheless, concerns about commercial confidentiality are significant and where important matters can be expressed without disclosure of this information then that course will usually be taken. 11 I have reviewed each of the paragraphs of the Statement of Agreed Facts and each of the documents in the Court Book over parts of which Reckitt Benckiser seeks confidentiality orders. I am satisfied that they fall within the categories I have described and that the proposed orders are necessary to prevent prejudice to the proper administration of justice. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman.

Australian Competition and Consumer Commission v Reckitt Benckiser

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