This article is part of our special report The demise of cash?.
SPECIAL REPORT: The European Commission is considering lifting restrictions applying to confidential internal documentation in the wake of a payment card legal case it lost earlier this year.
Margrethe Vestager, the EU Competition Commissioner, is considering lifting access to documents restrictions at a sensitive time, as her department is also dealing with the ongoing Luxleaks scandal affecting European Commission President Jean Claude Juncker.
The European Court of Justice ruled in September that the EU executive was wrong to deny MasterCard access to research that fed into the draft regulation capping cross-border card payments.
MasterCard applied for five papers, produced for the Commission by Dutch firm EIM, under the regulation for public access to European institution documents.
The EIM study was central to the draft interchange regulation, which is part of a package of revisions on payment services. The bill is currently in trilogue after lengthy debate in the Parliament.
New commissioner has plateful with access to documents and Luxleaks
The regulation caps the multilateral interchange fee (MIF), an interbank payment made for each transaction carried out with a consumer card, at 0.2% of the transaction value for debit card payments, and at 0.3% for credit card payments.
Commission lawyers claimed releasing the papers would “seriously undermine” its decision-making process on the bill since they dated back to a time, during 2011, when it had not even made a decision on the cap. The EU executive also argued publication would damage EIM’s commercial interests by exposing its working methods.
In a comprehensive defeat for the Commission the judges rejected these arguments.
“The institution cannot simply rely on the fact that that it received those documents from a third party or on the absence of a decision and thus decide that in those circumstances its decision-making process has been seriously undermined,” the judgment said.
The decision could open the door to businesses, NGOs and journalists demanding impact assessment documents, including those produced by third parties such as consultants, used by the Commission to justify its regulatory decisions.
That could lead to research and methodologies being challenged by industry before officials propose binding rules.
The timing is awkward at a time when competition commissioner is under the spotlight over the Luxleaks scandal, which Vestager’s department is also prioritising.
“The EU rules and case law on access to documents would normally oblige the Commission to release access to its documents relating to the Luxleaks dispute after any investigation has been completed. However, it should be possible under the law for the Commission to justify withholding those documents as long as an investigation is underway,” Steven Peers, professor of EU law and human rights law at the University of Essex, told EurActiv.
The Luxleaks documentation is not in the same category as the Mastercard documentation, since it does not relate to an impact assessment. Nevertheless the Commission is itself considering how far its disclosures may impact on competition cases.
“The Commission is in the process of reflecting on possible consequences for its policy with respect to access to documents. Internal consultations are ongoing,” according to spokesman Ricardo Cardoso.
Impact assessments are now routinely conducted to predict the likely consequence of EU legislation on citizens and the wider economy, in a detailed cost-benefit analysis.
Sacked science advisor warned about impact assessments
But they are controversial. The Commission is currently reviewing its impact assessment guidelines amid accusations that they are too politicised.
Anne Glover, the EU’s chief science advisor, has said that EU commissioners may sometimes request that specific “evidence” is presented in impact assessment studies in order to back their political initiatives. She specifically mentioned a fictional example of a Commissioner coming up with “crazy ideas” like banning credit card use.
The ruling could certainly stretch into sensitive areas, including the delicate negotiations surrounding the Transatlantic Trade and Investment Partnership, (TTIP) according to EU law expert Peers.
In theory, an exemption covering international relations would cover the EU-US trade talks, keeping TTIP documents out of the picture.
But it could be argued that an impact assessment relating to possible trade negotiations does not have the same significance as revealing the content of the negotiating mandate, Peers said.
Information revealing the Council negotiating mandate could be edited out, allowing the analysis in the rest of the document to be released, he added.
The landmark negotiations have been dogged by accusations of a lack of transparency, leading to yesterday’s (19 November) announcement by the commissioner for trade, Cecilia Malmström, that MEPs and the public will be given more access to TTIP negotiating documents.
The Luxleaks scandal erupted on 5 November 2014, when the International Consortium of Investigative Journalists (ICIJ) uncovered "industrial scale" tax evasion in Luxembourg at the time when Jean-Claude Juncker was prime minister of the Grand Duchy.
The investigation was based on a review of nearly 28,000 pages of confidential documents, which reveal that more than 300 international companies have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes.
Juncker, who is now President of the European Commission, rejects all accusations of masterminding corporate tax evasion as Prime Minister of Luxembourg and announced a new EU initiative to clamp down on tax avoidance.
European Court of Justice
Judgment: Judgment of the General Court