Case number: 98114, 98132, 98164, 98183

Case 98114, 98132, 98164, 98183. Disclosure of invoices paid to telecommunications companies - section 27(1)(b) and 27(1)(c) - whether disclosure could reasonably be expected to result in a material financial loss or could prejudice competitive position - whether disclosure could prejudice the conduct or outcome of negotiations - consideration of the public interest.

Case Summary

Facts

Mr Henry sought access to copies of all invoices paid to 18 telecommunications companies by the Department of Agriculture and Food, the Department of Finance and the Office of the Revenue Commissioners. One of the companies was Eircom Plc (known at the time and referred to in the decision as Telecom Eireann). The public bodies consulted Telecom Eireann under section 29 of the Freedom of Information Act. The Department of Agriculture and Food and the Office of the Revenue Commissioners decided to grant access to summary information. The Department of Finance decided to release the records sought by Mr Henry. Telecom Eireann applied for a review of the decisions of the public bodies by the Commissioner. Mr Henry applied for a review of the decision of the Department of Agriculture and Food. Telecom Eireann argued that section 27(1)(b) and 27(1)(c) applied, that the information in the records was commercially sensitive and that it was not in the public interest to disclose the relevant details. It argued that releasing the information could prejudice its ability to compete for future business from public bodies and, in the case of some products, it could prejudice its ability to provide such products to customers who are not public bodies.

Decision

The Commissioner found that Telecom Eireann was required to, and does, publish a scale of charges for many of its products and that it does not have complete commercial freedom to set its own prices in relation to specific customers. He also found that no decision had been made on the format of future competitions for the provision of telecommunications services to public bodies. In considering the use of the word "could" in section 27(1)(b) and (c), he decided that it meant that the provisions were capable of applying even where the harm was not certain to materialise but might do so. The Commissioner accepted that a competitor of Telecom Eireann could learn information from the records which it might find useful and that a loss of a substantial part of Telecom Eireann's current business with public bodies would result in a material financial loss to Telecom Eireann. However, he was not satisfied that an outcome that could reasonably be expected to resultfrom the release of the information would be the loss of a substantial part of the business which Telecom Eireann does with public bodies. The Commissioner was satisfied that release of the information could prejudice (in the sense of injure or potentially injure) the competitive advantage which Telecom Eireann enjoyed in the conduct of its business with public bodies. The Commissioner decided that this was sufficient to enable section 27(1)(b) to apply.

The Commissioner was not satisfied that release of the records could prejudice the conduct of any negotiations by Telecom Eireann. However, he was satisfied that release could prejudice the outcome of such negotiations. He decided that section 27(1)(c) applied.

In examining the public interest, the Commissioner commented that the public interest in public bodies obtaining value for money and in openness about the expenditure of public funds was not absolute. However, in this case he found that there was a significant public interest in ensuring that the public bodies concerned obtain value for money in purchasing telecommunications services and that this outweighed any public interest there might be in protecting Telecom Eireann's ability to do business with public bodies. He also found that that there was a public interest in ensuring the maximum openness in relation to the use of public funds and in requesters exercising their rights under the Act.

The Commissioner affirmed the decision of the Department of Finance and annulled the decisions of the Department of Agriculture and Food and the Office of the Revenue Commissioners. In the case of the latter two bodies, he decided that it was proper that Mr Henry should be granted access to the original records, subject to his right to agree with the public bodies concerned that he may accept the information in summary form and subject to certain deletions where the information could be used to effect a breach of the security of systems used by the public body concerned.

Date of Decision: 13.01.2000

DECISION

Background:

On 21 August 1998 Mr Mark Henry of Policywatch made requests to the Department of Agriculture and Food, the Department of Finance and the Office of the Revenue Commissioners under the Freedom of Information (FOI) Act, 1997 in which he sought copies of all invoices paid by these bodies since 21 April 1998 to 18 telecommunications companies, one of which was Eircom Plc (known at that time as Telecom Eireann, and referred to as such throughout the remainder of this decision).

The Department of Agriculture and Food clarified this request with Mr Henry who agreed to accept a summary of the details relating to Telecom Eireann. He also agreed to the deletion of certain secure or confidential telephone numbers. The Department then consulted Telecom Eireann. On 7 October 1998 the Department decided to grant access to summary information in respect of the invoices rather than copies of the actual invoices themselves and it informed Telecom Eireann accordingly. The summary gave details of the company name, invoice date, and totals for expenditure including rental, equipment, calls by category, other services and VAT. Telecom Eireann appealed to my Office against the decision of the Department. The application for review from Telecom Eireann was received on 21 October 1998.

On 22 October 1998, Mr Henry was informed that the Department had decided to "withhold access" to these records. He took this to be a refusal of access and, on 28 October 1998, he applied to me for a review of the decision. It appears that Mr Henry's decision to apply for a review may have been based on the mistaken understanding that the Department was refusing his request in full, whereas the true position is that the Department was prepared to give him access to a summary of the records. However, it is not clear that this summary would, in fact, meet Mr Henry's requirements and, in these circumstances, I accepted his application for review.

The Department of Finance identified records received from Telecom Eireann as falling within the terms of the request. Telecom Eireann objected to the release of the records relating to it and claimed the records were exempt under section 27 of the Act. On the 4 November 1998 the Department of Finance decided to release the records sought by Mr Henry. Telecom Eireann applied for a review of the decision of the Department. The application was received by my Office on 17 November 1998.

In the case of the Revenue, Mr Henry later confirmed that where invoices related to voice, fax and data telecommunications, summary details of major accounts were acceptable provided that the summary included a breakdown of expenditure in respect of different services (line rental, equipment rental, calls by type, etc.). He also confirmed that he was agreeable to excluding details of the Revenue's telephone numbers or numbers called by the Revenue. Mr Henry also confirmed that, where records were in electronic format, the information was to be supplied for the period 21 April to 21 August 1998. However, where records were in paper form only, information was to be supplied for the period 21 July to 21 August 1998. The Revenue indicated that the invoices relating to Telecom Eireann contained commercially sensitive information as defined in sections 27(1)(b) and (c) of the FOI Act and informed the requester that it was consulting with the company. The Revenue consulted with Telecom Eireann which objected to the release of the information under section 27 of the Act. On 20 November 1998 the Revenue decided to release the records in summary form on the basis that the public interest would be better served by granting than by refusing to grant the request.

Mr Henry was also informed of the decision on the same day.Telecom Eireann applied for a review of that decision to my Office. The application was received on 3 December 1998.

In the case of the Department of Agriculture and Food, a sample of each type of invoice falling within the request was furnished to my Office. These records are:

  • A Major Account Summary - this is a Telephone Service Account detailing a total figure for current charges exclusive of VAT and the total VAT charges. Enclosed with the Account is an analysis by account number of the line rental, equipment rental, total call charges, total plan charges and credits, other charges and credits and the total for each account. There is also an analysis of call charges in respect of inland calls less than 56 km, inland calls over 56 km, calls to mobiles, cross channel, international, premium rate, international VPN, local, directory enquiry, national and other chargecard, local, inland, cross-channel and international ISDN (Integrated Service Digital Network), VPN, and operator assisted calls. For many of these calls a discounted rate is shown. A summary of call charges by line, a summary of other charges and credits by account and a VAT statement are also provided.
  • An Eirpac Account - this account is for a shared service for data transmission. The Account details the period for which the service is provided and the technical information for the transmission and the charges and VAT.
  • A Private Circuit Account - this account is for transmission of voice and data by way of "leased line". The Account shows the connection fee, the leased line rental and credits for leased line ceasing rental.
  • Telephone Service Accounts - these accounts are the same as most domestic customers receive for home telephone accounts. They analyse the local calls between one unit calls and two to four unit calls and contain details of the units and charges for inland calls. The Account also shows the line rental and VAT.
  • Telecom Eireann Information Systems invoices for equipment.

In the case of the Department of Finance, the records are:

  • Telecom Eireann Information Systems invoice for equipment.
  • Telecom Eireann Eircell Accounts (these accounts include details of the GSM rental, rental offers, call charges, Eirtime and VAT).
  • Telecom Eireann Eirpac Accounts (similar to those accounts held by the Department of Agriculture and Food above).
  • Telecom Eireann Private Circuit Accounts (these accounts are the same as those received by the Department of Agriculture and Food referred to above). Some also contain details of the Local Area Network charges which cover leased lines over 2 mb.
  • Telecom Eireann Equipment Maintenance Accounts detailing recurring charges and VAT.
  • Telecom Eireann Telephone Service Accounts - (these accounts are the same as those received by the Department of Agriculture and Food). Some of the accounts include details of freefone regional and local calls, details of cross-channel, international and mobile calls, international volume discount, and details of the GTN (Government Telephone Network).
  • Telecom Eireann Telex Service Account showing line rental and VAT.

In the case of the Revenue, the records are:

  • Electronically transmitted Major Account Summaries containing the same type of information as the hard copy Major Account Summary held by the Department of Agriculture and Food.
  • Telephone Service Accounts for freefone numbers. These accounts detail the line rental, the number of freefone calls broken down as to regional and local, and the VAT.
  • Hard copies of the Major Account Summaries provided electronically.

Mr Henry confirmed with the Revenue that with regard to details of services provided for voice, fax and data telecommunications he was prepared to accept an account summary provided that this gives a breakdown of expenditure in respect of different services - i.e. line rental, equipment rental, calls (local, inland, etc.) and other services. On this basis the Revenue prepared such a summary from the Major Account Summaries mentioned above. These summaries are what Revenue decided to release in the place of the Major Account Summaries. However, having reviewed the Revenue's decision making file, it is not clear to me that what the Revenue propose to release will meet Mr Henry's requirements.

Naturally, it is open to a public body to agree with Mr Henry or any other requester that information be provided in summary form. In the absence of any mutual agreement in the case of the Revenue and the Department of Agriculture and Food, I have conducted these reviews on the basis that Mr Henry is seeking the information in the original records subject only to the deletions referred to above. In brief, the matter which is before me in this review is whether the records as described above but with the deletion of telephone numbers, names of individuals and numbers called should be released to Mr Henry.

I should also indicate at this stage that in the course of these reviews, Telecom Eireann suggested that the release of some of these records could have security implications for some public bodies, a matter not raised by the public bodies originally. It seems to me that Mr Henry's agreement not to seek telephone numbers, user names or numbers called largely deals with the concerns which the company has raised. Mr Henry has also made it clear that he does not want information which might be used to breach the security of systems used by public bodies. It is neither practicable nor desirable that I enter into a detailed investigation in relation to these specific records for the purpose of determining whether the release of particular account numbers or telephone numbers could enable the systems of a public body to be interfered with in some way. It is sufficient for me to say that nothing in this decision should be taken as a direction to release information of this kind. It would clearly be prudent for decision makers in public bodies faced with these and similar requests in the future to take appropriate advice so as to ensure that they do not inadvertently release exempt information which could be used to breach the security of the systems used by these bodies.

Telecom Eireann and Mr Henry made submissions to my Office. Representatives from my Office met with representatives from Telecom Eireann to discuss the company's objections. Clarification was sought from the company in relation to a number of issues. It became clear that the regulatory restrictions on Telecom Eireann were a significant concern in their submission and arguments to me.

Officials from my Office also met with a representative of the Office of the Director of Telecommunications Regulation (ODTR) to discuss the regulatory and market framework in which Telecom Eireann operates.

The ODTR described the background to the relevant EU directives and explained that their aim was to create a competitive market in place of the monopolies which exist or existed in Member States. As an incumbent operator Telecom Eireann is subject to detailed control which does not apply to new entrants to the market. One of the purposes of the directives is to ensure that prices are cost oriented, transparent and non-discriminatory. Special conditions in the licence issued to service providers apply to operators with significant market power. Telecom Eireann is the only operator with significant market power in Ireland at this time for the fixed telephone market. It was confirmed that Telecom Eireann must set tariffs which are cost oriented and transparent regardless of use or user. In effect, at this time Telecom Eireann's market is the telecommunications market in Ireland as it has access to nearly 100% of users. The ODTR confirmed that the regulations and conditions applying to Telecom Eireann will be reviewed on an on-going basis as the market develops. However, due to its dominant position in the market at the moment it is subject to more onerous conditions than other operators with regard to publication of information. There is no doubt that this affects the company when competing in the market place. In the view of the ODTR there would be a significant number of competitors for many of the services Telecom Eireann is currently providing to the public bodies. My Office also contacted the Centre for Management and Organisation Development (CMOD) of the Department of Finance with a view to obtaining information regarding the likely tendering process for telecommunications services in the future.

CMOD confirmed that its role in this was one of monitoring developments in telecommunications technology with a view to advising Departments on, and promoting the effective use of, telecommunications facilities and services. My discussions with CMOD indicate that the type of services which will be put out to tender in the near future may differ from the services currently provided by Telecom Eireann. I was also informed that tenderers would not be given a commitment in relation to projected volumes.

Submissions

Telecom Eireann

Telecom Eireann made a submission to me by letter dated 19 November 1998. Arising out of that submission, I raised a number of questions with the company and officials of my Office met with the company on 25 March 1999 to discuss the matter. Following that meeting the company clarified its position in further submissions dated 13 April, 26 April and 12 May 1999. I can summarise the company's arguments as follows.

The company claimed that section 27(1)(b) applies in this case. It advanced a number of arguments in support of this claim. The first is that the invoices provide information far in excess of that provided within its published schedule of tariffs. Analysis of the component elements of each invoice could provide a competitor with information on Telecom Eireann's market strategy and product mix for Government departments as a distinct market sector. As an example, it suggested that being aware of which Government departments use Virtual Private Networking (VPN) would clearly show Telecom Eireann's strategy for this sector of the business which, in turn, may lead to "cherry picking". It also argued that the invoices could easily be misunderstood and that the drawing of misleading conclusions could be harmful to the company. In the course of the review the company indicated to me the value of Government sector business to it and I was satisfied that the loss of that business or a substantial part of it would represent a material financial loss to the company.

The company also argued that section 27(1)(c) applied. In support of this claim it argued that release of the information in the invoices could confer an unfair competitive advantage on its competitors because Telecom Eireann does not have access to similar information on competitors' prices and marketing strategies. It claimed that even the smallest competitive advantage could be enough to prejudice contractual or other negotiations. It made two very specific claims on this score which I can summarise as follows.

The first related to services such as VPN (or, indeed, details of local, trunk or international calls) where the details of the company's tariffs are required by law to be published in its schedule of tariffs. Telecom Eireann said that the information in the invoices would provide competitors with information relating to call volumes. It claimed that "this would effectively eliminate Telecom Eireann from the market for these services because other operators have the advantage of knowing our prices in advance when submitting their tender in a sealed tendering process".

The second claim which the company made related to certain services or products, the prices for which are not published. I should note that the company appeared to have some difficulty in identifying what exactly these services or products were, although it suggested that certain leased lines were among the products in question. Its argument here is that in pricing such products it must follow the tariff principles in certain EU directives, in the Competition Act 1991, and in its licence conditions which basically require it to charge on a non-discriminatory basis. It claimed that by analysing the invoices in this case a competitor could determine its pricing policy in relation to such products, not alone in relation to the public sector, but in relation to the market generally. In the case of public sector contracts the result would be that its competitors would know the volume of business and Telecom Eireann's pricing policy in advance. The pricing policy could not be amended without notice. It follows, according to Telecom Eireann, that in future its competitors would have an advantage in any future competitions for the provision of such products to public bodies where the competition is conducted by way of sealed tender.

In summary, the company claimed that releasing the information sought in this case could prejudice its ability to compete for future business from public bodies. It could also, in the case of some products, prejudice its ability to provide such products to customers who are not public bodies.

In relation to the public interest, Telecom Eireann argued that requiring one party to a tendering process to disclose its bid in advance effectively eliminates them from the process which in turn may lead to a smaller number of operators in the process which is not necessarily for the benefit of the end user or in the public interest. It went on to say "The issue of what constitutes the public interest has been considered in a number of cases. Chief Justice Campbell inR. v Bedfordshire[24 L.J.Q.B. 84] stated that a matter of public or general interest 'does not mean that which is interesting as gratifying curiosity or a love of information or amusement; but that in which a class of the community have a pecuniary interest, or some interest by which their legal rights or liabilities are affected'. As Telecom Eireann's pecuniary interest may be adversely affected it would not be in the public interest to disclose relevant details.

Lord Justice Morris inEllis v Home Office[1953] 2 Q.B. 135 stated that 'one feature of the public interest is that justice should always be done and should always be seen to be done'. It is submitted that the cardinal feature of the public interest is doing of justice between parties. It is submitted that it would not be in the interests of justice or in the public interest to disclose all the information sought".

Telecom Eireann conceded that Government Departments seeking value for money is in the public interest but it said that as "cherry picking" tended to be based on price only it does not follow that the lowest bid is the best choice. It argued that, as the incumbent operator, Telecom Eireann could not compete on price solely.

During the course of the review I drew the company's attention to my decision in cases numbered 98049/98056/98057 - Henry Ford & Sons Limited, Nissan Ireland Limited, Motor Distributors Limited and the Office of Public Works("the OPW cases"). In these cases I found that details of the prices quoted by successful tenderers for the supply of vehicles to the Defence Forces was information to which section 27(1)(b) and section 27(1)(c) applied but that the public interest would, on balance, be better served by release in these cases. I asked Telecom Eireann to explain to me in what respect, if any, its situation differed from that of the successful tenderers in these cases.

In reply the company stated:

"The fundamental difference as we see it is that the records released in the OPW cases were post tender and therefore would not have affected the outcome of the tender process. The records being sought in Telecom Eireann's case, if released, will precede a full competitive tendering process and will, as previously stated, effectively eliminate Telecom Eireann from this market. It is also worth noting that the telecommunications market in Ireland was only liberalised in December 1998. As a result there is currently intense competition for market share. The transport market is on the other hand a more developed market and therefore the release of records may have less serious consequences.

Contracting for telecommunications services by Government Departments is carried out on a regular basis and is expected to increase given the competition in the market. The release of records is therefore likely to have an ongoing impact. I have no knowledge of how long the OPW contract was to run for but if, for example, it was for two or three years this may distinguish it from tendering arrangements for the telecommunications contracts".

Telecom Eireann also confirmed, in response to queries raised by my Office, that it did not have special pricing arrangements with all or some of the public bodies and it did not have arrangements in place to prevent customers other than public bodies disclosing the prices paid to Telecom Eireann. It also confirmed that there was nothing to prohibit public bodies disclosing the details contained in the records to a competitor in the course of negotiations, but argued that it was unlikely that they would disclose the level of detail which was in the records sought by the requester in the case.

Mr Henry

Mr Henry argued that the number of calls made and the types of those calls cannot be commercially sensitive information - everyone knows what types of call categories there are and the frequency of their usage has nothing to do with any commercial organisation but is information about the public body's own behaviour. The rates charged and any business discount scheme operated are published. The overall amount that the body spends on telecommunications is available in the book of estimates every year. Mr Henry stated that all he sought was a break down of the different call categories. He asked how pricing information that is publicly available could be commercially sensitive. He said that he was trying to identify top-line monthly expenditure in various call categories. He argued that the public interest is clearly served by the release of such information. Not only does it allow citizens to monitor government expenditure and ensure that it is being disbursed in a cost-effective and efficient manner but, he argued, it also encouraged competition in the sector which was stated government policy.

The arguments made by Telecom Eireann were brought to Mr Henry's attention. He was given an opportunity to address the issue in a further letter to this Office. In reply, Mr Henry argued that the potential prejudice to Telecom Eireann's competitive position was based on difficulties that the company was experiencing with its regulatory framework and its requirement to follow a consistent pricing policy. He queried whether this was a reason not to release information. He argued that it was reasonable to disclose the amount a public body was paying for a service regardless of the problems this might cause for one supplier (who cannot go lower than this price due to tight internal margins) over another (who could afford to charge the public body less and still make a profit). Mr Henry suggested that it was not the job of the Information Commissioner to protect the revenue stream of one (soon to be) private company rather than to facilitate the most efficient use of public funds.

Department of Agriculture and Food

The Department relied on its decision making file in the matter as its submission. The file suggests that the Department found the information contained in the invoices to be commercially sensitive but decided to release the information in a summary form.

Department of Finance

The Department of Finance made a submission to my Office in which it stated that having considered the submissions made by Telecom Eireann and having considered in detail the contents of the invoices, the Department did not consider that the records contained trade secrets. It also claimed that the records did not contain information whose disclosure could seriously prejudice the conduct or outcome of contractual or other negotiations of the person to whom it relates or information whose disclosure could reasonably be expected to result in a material financial loss or gain to the company to whom the information relates, or information whose release could prejudice the competitive position of that company in the conduct of its business. The Department said that the information contained in the records was low level, basic information and stated that a member of the public having a telephone at home would have the same basic charges as those on many of the invoices. In support of its position it stated that the Department did not have an exclusive pricing agreement with the company and, to its knowledge, it was charged at a general rate which was already in the public domain.

The Department also stated that the information in the invoices was the property of the Department. As a public body the Department had a need to be transparent in its spending on services and would provide the type of information in the invoices to the Dail if requested by Parliamentary Question. Furthermore, the Department claimed that the company had not adequately demonstrated how disclosure of the records would be harmful to its interests. In the view of the Department, there was a strong public interest in the public availability of information that would help ensure that the Department was getting a competitively priced telecommunications service. It was of the view that the public interest outweighed the interests of the suppliers of the service.

The Revenue

It was agreed with the Revenue that its decision-making file would be accepted as its submission to this Office. The Revenue reviewed the records of Telecom Eireann in the light of sections 26 and 27 of the Act. In reviewing the possible application of section 26, the Revenue found that the invoices were supplied by Telecom Eireann to the Revenue in the course of the performance of its functions as a service provider under a contract for services and, as such, section 26 couldnot apply.

In its review of the application of section 27, the Revenue decided that the information, if released, could reasonably be expected to prejudice the competitive position of Telecom Eireann and therefore section 27(1)(b) applied. It also decided that there was some potential risk that the information would become available to a third party in negotiation with Telecom Eireann and, therefore, that section 27(1)(c) applied. It found that section 27(2) (which allows for certain records falling within section 27(1) to be released) did not apply.

The Revenue then examined the question of the public interest test which is provided for in section 27(3). In favour of releasing the information, the Revenue found a public interest in enhancing the accountability of government with regard to the effective use of resources by providing access to information about the operations of government agencies. It found that it could also be argued that the external monitoring already takes place through the C&AG and the Public Accounts Committee. In favour of withholding the information, it found that there was a public interest in ensuring that companies should not be impeded in the legitimate pursuit of their business or have their competitive position undermined by disclosure of information. However, it was of the view that the spirit of the FOI Act is such that service providers when acting as such are viewed differently to companies generally. In weighing up the factors, it considered whether the interest in the information was a genuine public interest as opposed to a narrow sectional interest or just curiosity.

It regarded the question of tendering for services to be significant. In considering this question it did not regard as relevant the reason why a service has or has not been the subject of a competitive tendering process. The monitoring procedures in place generally operate after the service has been provided and the money spent. Competitive tendering is an effective means of ensuring value for money before money is spent. It decided that, where a service has not been the subject of a competitive tendering process, disclosure can serve the public interest by causing earlier examination of the effective and efficient use of resources. It decided that where a service has been the subject of a competitive tendering process the public interest in disclosure would be less, but still permits earlier external evaluation. However, it decided that disclosure was not as valuable to the public interest where the service had been the subject of a tendering process unless there were concerns that the service was not being provided in accordance with the terms of the tendering process or concerns about the tendering process itself. It found that in such circumstances any further interest was either a narrow sectional interest or mere curiosity. It found that the services referred to in the record had not been the subject of a competitive tendering process and because of this the public interest in disclosure had a greater weight. It found that the public interest would be better served by disclosing the information than by withholding it.

Findings

The decision in this case turns on the question of whether the provisions of section 27(1)(b), 27(1)(c) and 27(3) apply. I propose to consider the application of these three provisions in turn. Before doing so, however, it is convenient for me to make some preliminary findings of fact.

The first finding relates to the publication of Telecom Eireann's prices. I am satisfied that the company is required to, and does, publish a scale of charges for many of its products and services. I am also satisfied that it believes that it is not required to publish, and does not publish, prices in relation to certain other products or services. I make no specific finding as to what these products are because it is not necessary for me to do so for the purposes of this decision.

The second finding relates to the company's ability to set its prices. In the light of the company's evidence and the evidence given to me by the ODTR, I find that the company does not have complete commercial freedom to set its own prices in relation to specific customers. In particular, in the case of certain products it must set tariffs which are cost oriented and transparent.

The third finding relates to future competitions for the provision of telecommunication services to public bodies. I find that no decision has been made on the format of any such competitions. I find that there is no guarantee that the services procured in the future will be the same or similar to those currently provided by Telecom Eireann. I find that, as of now, there is no intention to give a commitment to tenderers about projected volumes.

I think that I should also draw attention at this stage to the terms of section 34(12) of the FOI Act. This provides that a decision to grant a request to which section 29 applies shall be presumed to have been justified unless the third party concerned shows to the satisfaction of the Information Commissioner that the decision was not justified. In the circumstances the onus of satisfying me that the decisions by the Revenue, the Department of Finance and the Department of Agriculture and Food to release the records in this case are not justified, rests with Telecom Eireann.

Section 27(1)(b)

This section provides that a head shall refuse to grant a request under section 7 if the record concerned contains

"(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation, ........."

I am satisfied that the information in this case comes within the description "financial or commercial". However, the essence of the test in section 27(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The subsection protects information whose disclosure;

  • could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates or
  • could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.

I think that the arguments of the company in relation to section 27(1)(b) really come down to two points. The first is that an analysis of the records in this case could provide a competitor with Telecom Eireann's market strategy and product mix for Government departments. The second is that the invoices could be misinterpreted or misunderstood and the drawing of misleading conclusions could be harmful to the company.

I shall deal with the second point first. I do not accept that the possibility of information being misunderstood is a good reason to refuse access to information under the FOI Act. In any event, and dealing with this point in the context of section 27(1)(b), I am not satisfied that the possibility of the information being misunderstood is something to be taken into account in considering whether disclosure could reasonably be expected to result in a material loss to Telecom Eireann. Neither am I satisfied that the possibility of the information being misunderstood is something that could prejudice the competitive position of the company.

Turning now to the first point, I accept that a competitor could, indeed, learn something about the products and services which Telecom Eireann provides to the public bodies concerned from an analysis of these invoices. A study of similar invoices for all public bodies over a period of time would enable a competitor to obtain very accurate information about how the telecommunications needs of public bodies are being met at present.

It is possible to overstate the importance of this information to competitors. Take, for example, the company's argument that competitors could learn from these invoices which public bodies already had VPNs and could target those which did not. No doubt this is possible, but one has to wonder why a competitor who seriously wishes to target this market would not just approach public bodies directly for this information. Furthermore, as a more general point, there was no evidence available to me that lack of information about these services and products currently being provided by Telecom Eireann to public bodies, and their costs, was a significant stumbling block to a competitor seeking to target this market. Indeed, Telecom Eireann seemed to acknowledge that the information may not be of crucial significance. In its letter of 19 November 1998 it referred to the release of information as conferring an "unfair" competitive advantage on its competitors. It went on to say that "even the smallest competitive advantage" can be enough to prejudice contractual or other negotiations. It seems to me that this is an accurate indication of the significance of the information i.e. it is information which might confer an advantage if known to a competitor.

Nevertheless, I accept that a competitor could learn information from these invoices which it might find useful. I also accept that the loss of a substantial part of its current business with public bodies would result in a material financial loss to Telecom Eireann. The question arises as to whether this is sufficient for the exemption in section 27(1)(b) to apply.

Section 27(1)(b) provides, inter alia, that a head shall refuse access (subject to the public interest test in section 27(3)) if access "could" reasonably be expected to result in a material financial loss to the person to whom the information relates. The word "could" seems to allow for more generous latitude in refusing to grant access on the ground of perceived harm than the word "would". It seems to me that this part of section 27(1)(b) can apply even where such harm is not certain to materialise but might do so.

In the case of The Sunday Times Newspaper & Others and the Department of Education and Science (decision number 98104), I explained my approach to interpreting the words "could......reasonably be expected to......" in the context of section 21 of the Act. Having reviewed the case law dealing with the interpretation of this phrase in the context of Freedom of Information legislation in other jurisdictions, I concluded that

"Some care is needed in relying on the dicta which I have just quoted because in the Cockcroft case the majority warned against the dangers of paraphrasing the words under discussion. Nevertheless, it seems to me that the dicta are useful in highlighting that the test is not concerned with the question of probabilities or possibilities. It is concerned with whether or not the decision maker's expectation is reasonable."

In the present case is it reasonable to expect that release of the information in the invoices could result in a material loss to Telecom Eireann? I am not satisfied that it is. Useful though the information may be, I am not satisfied that it is of such crucial importance to Telecom Eireann's competitors as to enable it to be said that an outcome which could reasonably be expected to resultfrom its release would be the loss of a substantial part of the business which Telecom Eireann currently does with public bodies.

Section 27(1)(b) also applies where release could prejudice the competitive position of a person in the conduct of his or her profession or business or otherwise in his or her occupation. It seems to me that at the moment Telecom Eireann enjoys a certain competitive advantage in dealing with public bodies. It is the advantage which a provider of services normally enjoys, of knowing more precisely than potential competitors what the customer's needs are and of being able to anticipate those needs. The information contained in these invoices could prejudice (in the sense of injure or potentially injure) that advantage and could be said to prejudice the competitive position which Telecom Eireann now enjoys in the conduct of its business with public bodies. I am satisfied that this is sufficient to enable section 27(1)(b) to apply. Section 27(1)(c)

This section provides that a head shall refuse to grant a request under section 7 if the record concerned contains -

"(c) information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates".

It seems to me that there is a degree of overlap between the company's arguments in relation to section 27(1)(b) and those which it makes in relation to section 27(1)(c). However, in arguing its case for section 27(1)(b) to apply it concerned itself largely with the question of prejudice to its competitive position generally.

In arguing that section 27(1)(c) applies it made two very specific points. The first was that the information in these invoices would provide competitors with information relating to call volumes. It argued that in the case of services where the company publishes its tariffs, the result would be that in any further competition to choose a provider of telecommunications services, conducted by way of sealed tender, its competitors would know its precise bid. This would effectively eliminate it from the competition.

I accept that future negotiations for the provision of certain telecommunications services to the public bodies whose records are the subject of the present review are likely. I am not satisfied that release of the disputed records could prejudice the conduct of any such negotiations by Telecom Eireann. I am satisfied that release could prejudice the outcomeof any such negotiations, as far as the company is concerned. I am so satisfied simply on the basis that the better informed its competitors are, the more likely they are to succeed at Telecom Eireann's expense. I should make it clear, however, that I do not accept that its competitors can apply a simple formula to determine with certainty the amount of any bid by Telecom Eireann. This is because the information about call volumes is historic information. There is no guarantee that future volumes will, in fact, be the same or similar.

The company made a second specific argument relating to products and services, the prices for which are not published. It claimed that by analysing the invoices a competitor could determine its (Telecom Eireann's) pricing policy in relation to such products or services not just in relation to the provision of these services/products to public bodies but in relation to their provision to the market generally. The implication here is that release of the information would result in a loss of business not just from public bodies but from other customers as well.

I have serious doubts as to whether it is possible for the company to keep secret its pricing policy in relation to such products. I note, in particular, that the company conceded that it did not have arrangements in place to prevent customers other than public bodies disclosing its prices to its competitors. It also confirmed that there was nothing to prohibit public bodies from disclosing this information to its competitors. If the company's ability to continue to provide these services or products does, indeed, depend on its ability to keep its pricing policy strictly secret, then I would have expected that it would at least take some steps to prevent customers disclosing the prices to its competitors, something which on its own evidence it has not done.

I am not convinced that prejudice to the conduct or outcome of contractual negotiations is either inevitable or even likely as a result of the release of this information. However, as I have already indicated above in the context of section 27(1)(b), the use of the word "could" means that the exemption is capable of applying even where the harm is not certain to materialise but might do so. I am satisfied that the disclosure of the information in the records about the products/services the prices of which are not published could prejudice the outcome of negotiations.

The Public Interest

Section 27(3) provides that the exemptions contained in section 27(1)(b) and 27(1)(c) are not to apply in relation to a case "in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the request under section 7 concerned".

I explained at some length my approach to the application of section 27(3) in my decision in the OPW cases, to which I referred earlier. I indicated to Telecom Eireann that I was likely to apply similar reasoning in the present case and asked it to explain why I should not do so. In the circumstances, I think that it is useful for me to repeat the relevant part of my decision in the OPW cases which is as follows:

"In relation to the positive public interest which would be served by disclosure, it seems to me that there are two. The first is the public interest in ensuring the maximum openness in relation to the use of public funds. Such openness is a significant aid to ensuring effective oversight of public expenditure, to ensuring the public obtains value for money, to preventing fraud and corruption and to preventing the waste or misuse of public funds.

Motor Distributors Limited has argued that there are existing mechanisms to ensure accountability and that these are adequate. It is not for me to comment on the adequacy of such mechanisms. I do not accept that the existence of current safeguards in relation to public expenditure means that there is no public interest in creating further safeguards. The very existence of secrecy carries with it the scope for abuse. In contrast, openness in relation to public expenditure is an important additional safeguard against fraud, waste and misuse of funds. I consider that the public interest in openness about public expenditure is of very great significance.

The second positive public interest which would be served is the public interest in requesters availing of their rights under the Act. Motor Distributors Limited argued strongly that no such public interest arose in this case. It characterised Mr Henry's request as one born out of curiosity. Section 8(4) requires that a public body, in dealing with a request, disregard any belief or opinion it may have as to the reasons for the making of the request. In the light of this, I do not consider that I can take Mr Henry's motive into account. I can see nothing in the Act which requires me to discriminate between requesters seeking information of the kind covered by Mr Henry's request and to accept that one requester is more worthy than another.

I also do not accept the argument that the central public interest disclosed by the Act is the right of members of the public to access personal information about themselves and to correct it, if necessary. Indeed, Motor Distributors Limited conceded that this was not the full ambit of the Act. In my view, therefore, there is a public interest in any member of the public availing of his or her rights under the Act and it is a factor which cannot be lightly dismissed.

As I have said, the public interest factors in favour of disclosure, which I have described above, have to be balanced against the harm which might be caused by disclosure. In approaching this balancing test, it seems to me that I must identify the possible harms and then weigh them against the public interest in favour of disclosure, taking into account both the degree of harm and the likelihood of its occurrence.

In discussing the possible application of section 27(1)(b) and 27(1)(c), I have accepted that there is the possibility of prejudice to the competitive position of some of the tenderers in this case and that release could also prejudice the conduct or outcome of negotiations. While I must take these matters into account in considering where the balance of the public interest lies, I have decided that they should not be accorded significant weight. In so deciding I have taken into account a number of factors. The first is that the information is historic, pertains to a single transaction and, of itself, discloses nothing about the policy adopted by tenderers or how they arrived at the quoted prices. Because of this it seems to me that release of the information could not have the same adverse impact as, for example, the release of a trade secret comprising a secret process where release could result in a material loss to the party concerned.

The second factor which I have taken into account is that no evidence was presented to me that the harms envisaged by section 27(1)(b) and 27(1)(c), and which I accept could occur, are likely to occur. In balancing the public interest, a prejudice which is no more than a mere possibility has to carry a great deal less weight than a prejudice which is likely to occur".

Telecom Eireann made a number of responses to these points. In the first place, it claimed that the records in the OPW cases were what it called "post tender" and their release would not have affected the outcome of the tender process. It claimed that the release of the records in the present case, if it happens, will precede a full competitive tendering process and will effectively eliminate Telecom Eireann from the market.

I have already indicated that I accept that the information in these records may be of some value to Telecom Eireann's competitors. However, for the reasons which I have already given I am not satisfied that the release of the information would effectively eliminate Telecom Eireann from future competitions. I am satisfied that there is a significant public interest in ensuring that the public bodies concerned obtain value for money in purchasing telecommunications services.

There is also, as I indicated in the OPW cases, a public interest in ensuring the maximum openness in relation to the use of public funds. I note the point made by the Revenue that the services in this case had not been the subject of a competitive tendering process. While I do not necessarily accept all of the reasoning of the Revenue in its decision, it seems to me that its finding that there is a greater public interest in disclosure in this case because of the absence of a tendering competition has some merit.

Telecom Eireann also argued that the market for telecommunications services is very competitive. It suggested that the transport market was more developed and that the release of the records in the OPW case might have less serious consequences. It is true that in the OPW case I took the view that because the information was historic, pertained to a single transaction and, of itself, disclosed nothing about the policy adopted by the tenderers or how they arrived at the quoted prices, the scale of any adverse impact on a tenderer could not be as great as, say, that resulting from the release of a trade secret. I made these comments in the context of considering the possible loss of business to the tenderers from parties other than OPW.

On the other hand, Telecom Eireann's primary (although not its sole) concern appears to be the loss of future business from public bodies. I do not intend to speculate on the likelihood or otherwise of such a loss. The key point, as far as I am concerned, is that in this case there is a significant public interest in public bodies obtaining value for money, that this public interest is served by release of the maximum amount of information about the telecommunications services purchased by public bodies and that this outweighs any public interest there might be in protecting Telecom Eireann's ability to do business with public bodies.

I should make it clear that the public interest in public bodies obtaining value for money and in openness about the expenditure of public funds is not absolute. There could be cases, for example, where the effect of disclosing details of transactions between a private company and a public body would be to totally undermine the business of the company. Release in such cases could tend to discourage companies from dealing with the public sector and this would not be in the public interest. However, given the scale of Telecom Eireann's business with public bodies, I am satisfied that these are factors which need not be taken into account in the present case.

In relation to the possible loss of business from parties other than public bodies, I have already indicated that I accepted that release in this case could prejudice the outcome of negotiations with parties other than public bodies but that I was not satisfied that such an outcome was inevitable or even likely. Therefore, in deciding where the balance of the public interest lies this is not a factor to which I accord significant weight.

Telecom Eireann also argued that the release of the records is likely to have an ongoing impact on it. Its comments were made in the context of the provision of services to public bodies. I accept that, if the company does indeed lose the business which it claims that it will lose, this is likely to have an ongoing impact. Once again, however, I am satisfied that the public interest is better served by release in this case, even at the expense of an ongoing loss to Telecom Eireann of business from public bodies.

Telecom Eireann also made two specific points to me regarding the public interest. The first was that release would not be in the public interest because it could affect a pecuniary interest of Telecom Eireann's.

In support of this point it referred me to a statement by Chief Justice Campbell in R v Bedfordshire [24 L.J.Q.B. 84]to the effect that the public interest does not mean that which is interesting as gratifying curiosity but that in which a class of the community have a pecuniary interest or some interest by which their legal rights or liabilities are affected. The facts in the case of R v Bedfordshireare far removed from those of the present case and I have found the case of little assistance in seeking to apply the provisions of section 27(3). In any event, it does not seem to me to be authority for the proposition advanced by Telecom Eireann viz. that it would not be in the public interest to release this information if to do so would adversely affect its pecuniary interests.

Telecom Eireann also referred me to a remark of Lord Justice Morris in Ellis v Home Office [1953] 2 Q.B. 135that "one feature of the public interest is that justice should always be done and should always be seen to be done". Once again, I found this case of little assistance to me, concerned as it was with the question of whether a plaintiff was entitled, in the course of an action against the Home Office, to see certain documents in respect of which the Home Office claimed privilege.

Telecom Eireann's basic point here appears to be that release of the information would be inequitable or that it would result in any future competition for the provision of the telecommunications services to public bodies being inequitable. It is necessary to examine this claim in a little more detail. In part it is based on the view that knowledge by its competitors of Telecom Eireann's prices plus the volume of services will leave it at a severe disadvantage in future competitions.

Any future competition for the provision of telecommunications services is not an academic exercise designed primarily to achieve "fairness" as between potential suppliers. Its primary purpose, presumably, is to secure the best service on the most attractive terms. Naturally, one would expect that any such competition would be conducted in a scrupulously fair manner. However, what Telecom Eireann seems to be arguing is that fairness dictates that certain information which, on its own evidence, could influence the outcome of the competition should be withheld from all participants other than itself.

It is necessary to be very clear about the nature of the information at issue in this case. The Department of Finance referred to the information as "the property of the Department". I would not put the matter in that way. However, I do accept that the information is primarily about the activities of the public bodies concerned, what they purchased, from whom and for how much. I fail to see how there is any unfairness in a public body making whatever use it sees fit of such basic information. In particular, I can see no reason of equity as to why the information should be known only to the current supplier.

It seems to me that such disadvantage as Telecom Eireann may suffer is an inevitable consequence of a regulatory regime which requires it to publish its prices. That regulatory regime, in turn, is based on the public interest in the emergence of a competitive environment for the provision of telecommunications services in Ireland and in the protection of the public against the diseconomies of a monopoly supplier. Looked at in isolation particular aspects of that regime which happen to erode Telecom Eireann's commercial freedom could be argued to be "unfair" to it. However, it does not follow that public bodies can or should attempt to mitigate that "unfairness" by refusing to give full details of their purchases of telecommunications services.

In the same vein, Telecom Eireann argued that the release of the information in this case would reveal its general pricing policy in relation to some products or services and this would be "unfair". Once again, any difficulty which the company may have seems to me to derive not from the fact that the prices of particular transactions will be revealed by the release of these records but from the requirement that Telecom Eireann ensure that its charges in some areas be cost-oriented and transparent.

Any adverse consequences for Telecom Eireann seem to me to derive from the regulatory regime under which it operates rather than from the release of the information. In these circumstances I find that any public interest in ensuring that Telecom Eireann is fairly treated does not require that the information in these records should be withheld.

In summary, I find that

  • release of these records could prejudice Telecom Eireann's current competitive position in dealing with public bodies
  • release of these records could also prejudice the outcome of negotiations for the future provision of services by Telecom Eireann to public bodies and to others
  • the regulatory regime under which Telecom Eireann operates is designed to further the public interest in the emergence of a competitive environment for the provision of telecommunication services in Ireland, and it may operate to erode the company's commercial freedom
  • there is a public interest in ensuring the maximum openness with regard to the use of public funds, particularly, but not exclusively, with a view to ensuring that public bodies obtain value for money when purchasing telecommunications services
  • there is also a public interest in requesters exercising their rights under the Act
  • despite the possible disadvantages to Telecom Eireann, the public interest is, on balance, better served by release of the records in these cases.

Decision

Having completed my review under section 34(2) of the Act, I affirm the decision of the Department of Finance and I annul the decision of the Department of Agriculture and Food and the decision of the Office of the Revenue Commissioners. In the case of the latter two bodies, I have decided, in accordance with section 34(2)(b)(ii), that it is proper that Mr Henry should be granted access to the original records, subject to his right to agree with the public bodies concerned that he may accept the information in summary form and subject to the deletion of details of telephone numbers of the public bodies, names of individuals, numbers called by the public body and account numbers where the latter could be used to effect a breach of the security of systems used by the public body concerned.

Information Commissioner

13 January 2000