COMPETITION IN DIGITAL MARKETS

Legal Professional Privilege in the Context of Competition Law: Turkey and Ukraine

Competition authorities’ frequently obtain information and documents which may be  used as evidence in the context of undertakings. Such information could reveal sensitive concerns that are protected under the legal institution known as “attorney-client privilege”. At this point, whether the information arising during the inquiries of the authorities can be protected by this framework of confidentiality has a special importance. As it will be explored in this article, the question on whether the confidentiality principle is violated while competition watchdogs perform on-site inspections, or if such an inspection may entail a disclosure of sensitive information of a client, need to be further discussed. This brief analysis will be framed for the national scopes of both Turkey, and Ukraine. As we are all aware about Ukraine’s current hardship, may this humble piece help us to draw the attention too onto some particularities of its legal system, keeping the hopes for a peaceful outcome for their land and for global democracy.

Gözde Diktas

September 21, 2022

Introduction

In the context of antitrust regulation, legal professional privilege has a rather broad extent. It includes both attorney-client and work product privilege, with materials and documents prepared for litigation, most of these resulting from an antitrust investigation. In the United States, legal professional privilege encourages compliance with the law as it creates conditions where attorneys, both in-house and external, can indulge clients to discuss their plans in a way that allows the attorney to provide guidance about what is permitted and what is not. The United States Supreme Court has noted this as follows: “the privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice.” Similar to the US, in the European Union, legal professional privilege is shaped by the EU regulations and the decisions of the Court of Justice of the EU (“the CJEU”)  which are often referred to by Turkish competition law. After first addressing case, AM&S Europe Ltd v European Commission, in the Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v. Commission case, the CJEU stated two conditions required to be able to benefit from the legal professional privilege; materials/documents in question of examination (1) shall have been prepared for the purposes of defense, and; (2) shall not cover communication and materials prepared by an in-house lawyer due to the lack of independence of such in-house lawyer resulting from labor relationships with a company even if such in-house lawyer is a member of a national bar (Netherlands bar in this case).

With this decision, the CJEU does not only apply the above mentioned criteria to the documents composed within the investigation process, but it also leaves room for the materials and documents composed before initiating administrative procedure (i.e. an investigation) to benefit from the protection of the legal professional privilege. This is a crucial point if we aim to  analyse the Turkish experience and how it differs from the previous picture.

Moreover, while the status of, and access to legally privileged materials both in the US and in the EU is covered by special regulations, Turkey and Ukraine have not yet a particular legal framework  directly related to the attorney – client privilege in the competition area. 

Turkey

Considering the authorizations of the Turkish Competition Authority (hereinafter referred to as the “TCA”) provided by the Turkish Competition Act No. 4054 (“Turkish Competition Act”), the TCA has quite broad authority in obtaining information and collecting documents. When remembering the expanded authority of on-site inspection by the amendment to the Turkish Competition Act in 2020 and the Guidelines on the Examination of Digital Data during On-Site Inspections, attorney-client privilege gains more importance.

As per Art 14 of the Turkish Competition Act, the TCA may require any information it deems necessary from all public institutions and organizations, undertakings, associations of undertakings to fulfill its duties and officials of these authorities, undertakings and associations of undertakings are obliged to provide the requested information within the period to be determined by the TCA. According to Art 15 of the Turkish Competition Act, the TCA has the authority to exercise on-site inspections in undertakings or associations of undertakings. It should be noted that there is no further explicit regulation on this matter in which cases this authority can be limited. However, one point of view asserts that different branches of law cannot be considered to be independent from each other and hence main principles in criminal law can be adapted to other fields of law such as competition law. Just like the way that the TCA could not ask and legally obtain information by forcing; it also could not ask for any information by violating attorney-client privilege which the Criminal Procedure Act mentions in Art 130. 

When taking a look at the decisions of the TCA, it is noticed that there is a diversity in the TCA’s practices due to the lack of specific legislation on this subject. It is possible to acknowledge that the TCA has adopted the approach that allows benefiting from legal professional privilege not in every case but when the certain conditions exist. In other words, the TCA may disregard the legal professional privilege in certain circumstances. As per the TCA’s practice  (such as Warner Bros numbered 19-04/36-14 and dated 17.01.2019), Enerjisa numbered 16-42/686-314 and dated 06.12.2016) and, Dow Turkey numbered 15-42/690-259 dated 02.12.2015), the principles attributed to the legal professional privilege in Turkish competition law can be outlined as follows:

-The documents should concern the right to defence (it is mostly in the form of legal advices so far), and; 

-This legal advice should be provided by an independent attorney other than in-house lawyers.

In this regard, the Enerjisa brief is worthy of particular attention since the decision of the TCA has been subject to the administration court. According to the TCA’s decision, the legal advice given by an independent attorney on how the Turkish Competition Act can be infringed does not concern a right to defence, and thus the documents cannot take benefit from the legal professional secrecy. In addition to that, the court granted the two criterions of the TCA to follow in the detection of legal professional privilege, it held that such sort of legal advice is towards the purpose of the compliance process of the undertaking, and thus it helps the undertaking avoid an anti-competitive behavior rather than providing with a way to breach the law. Therefore, this legal advice can be considered to concern the right to defence.

However, the District Administrative Court revoked the decision of the administrative court on the ground that there was no present case brought into court arising from an investigation by the TCA  when the report of the independent attorney was composed, so the report is not directly concerning the right to defence. Apart from this decision, there are not many cases which were made subject to administrative courts, so it should be known that the topic still remains unclear under Turkish law.

In spite of this blurriness in interpreting the context of the right to defence, the TCA keeps following its approach on legal professional privilege in recent cases. In Huawei’s docket, numbered 19-40/670-288 dated 14.11.2019, because the independent attorney is added into only “cc” section in the emails between the in-house lawyer and the employee of the undertaking, the TCA did not consider the information given as legal advice to be between undertaking and an independent attorney, so it did not find adding in “cc” enough to take advantage of attorney-client privilege. In another case in 2020,  Çiçek Sepeti  decision numbered 20-32/405-186 dated 02.07.2020,  the TCA dismissed the demand of giving the legal letters, obtained during on-site inspections, back to the undertaking as it was emerged that the attorney was working under a labor  contract. 

Ukraine

The criteria of legal professional privilege in antitrust investigations in Ukraine, is also quite vague. Unlike specific procedural rules in the EU and the US, but similar to Turkey, competition law provides the Antimonopoly Committee of Ukraine (the AMCU) with a huge access to confidential information of undertakings and there is no detailed regulation on this issue provided further. Thus, the AMCU has almost absolute power to demand from companies any documents, or information, including those with restricted access, and in case of failure to provide the information when requested, the undertaking would be fined by the AMCU.

On the other hand, legal professional privilege is generally regulated by the Law of Ukraine On Advocacy and Advocatory Practice in Ukraine (“Advocacy Law”). Nevertheless, it does not include the provisions on the status of privileged data when it is requested from a client within official proceedings. Advocacy Law also remains silent about whether legal privilege may apply to an in-house lawyer if she or he is admitted to the bar. In consequence, there are different interpretations on what the competent authorities can assert in the case of disclosure of information directly from an investigated undertaking. 

This normative gap in Ukrainian Law gives rise to a significant legal risk of involuntary disclosure of privileged data especially when considering the fact that only qualified attorneys have the authority for the representation in court. In addition, the trend which grants authority in court representation to qualified advocates relates only to litigation proceedings, thus any other official proceedings are totally out of the scope. That means investigations of the AMCU are also not covered. According to Ukrainian competition specialists, preservation of the legal privilege in AMCU investigations needs special regulation since such investigations involve commercially sensitive matters as well as extensive powers of the AMCU to investigate such as the right to seize documents, servers, and search premises. 

Conclusion

Whereas the status of legally privileged materials both in the US and in the EU is covered by special regulations, Turkey and Ukraine have not yet a particular regulation directly related to such legal privilege in the competition area. However, unlike the AMCU, the TCA has been evaluating legal professional privilege and following an approach similar to that of the European Commission. Accordingly, in order to deem the information privileged, the attorney must be independent and the information collected must be associated with the right to defence. 

It is important to note that, although the CJEU leaves a margin for the materials and documents composed before initiating an investigation to benefit from the protection of the legal professional privilege, Turkish District Administrative Court took the documents composed before an investigation out of the scope of right to defence.  However, it must be remembered there is no precedent on this topic to date.

In Ukraine, legal professional privilege is only regulated by the Law of Ukraine On Advocacy and Advocatory Practice in Ukraine, but since Advocacy Law is applicable to only qualified advocates in litigation proceedings, other proceedings such as investigation of the AMCU are regarded as uncovered by the law.

Gözde Diktas is a qualified lawyer admitted to the Istanbul Bar Association in Turkey. She experienced an international traineeship on Information Technology Law and Data Privacy (based on GDPR) in Ukraine and currently work in Malta for an international tech company. She studied the US. Common Law during her bachelor’s program, and she has published in the field of competition law and an international report on internet censorship with the endorsement of the Council of Europe. She is a researcher in Big Data & Antitrust Research Cycle in the Institute for Internet & the Just Society.  She is fluent in English and Turkish, and can communicate in French.