Ó Oifig an Choimisinéara Faisnéise
Cásuimhir: 180257
Foilsithe
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Whether the Regulator was justified in its decision on a request to which section 38 of the FOI Act applies that, on balance, the public interest was better served by the grant of partial access to certain records concerning unclaimed prize funds, applications for games and for other matters such as the testing of new lottery balls, draw based games lifecycles and amendments to game rules
28 March 2019
This review arises from a decision made by the Regulator to grant partial access to records relating to a request to which section 38 of the FOI Act applies. Section 38 applies to cases where the FOI body has formed a view that the record(s) in question are exempt under section 35 (confidential information) and/or section 36 (commercially sensitive information) and/or section 37 (personal information) but that the record(s) should be released in the public interest.
Where section 38 applies, the FOI body is required to notify an affected third party before making a final decision on whether or not the exemption(s), otherwise found to apply, should be overridden in the public interest. The requester, or an affected third party, on receiving notice of the final decision of the FOI body, may apply directly for a review of that decision to this Office.
On 30 April 2018, an individual made an FOI request to the Regulator for various records concerning PLI, which operates the National Lottery under licence (the Licence). The Licence was issued in February 2014 and the Regulator, the Minister for Public Expenditure and Reform (the Minister) and PLI were parties to it.
In general, the request sought records relating to (a) the disclosure of information regarding unclaimed prize funds, (b) the Regulator's decisions refusing applications by PLI for certain games and other matters, and (c) PLI's applications relating to, and the Regulator's assessments of, the calibration and the testing of new lottery balls, draw based games lifecycles and amendments to games rules.
On 14 May 2018, the Regulator provided PLI with copies of the 25 records it had identified as within the scope of the request. It said that, having considered sections 35 to 37, its view was that the public interest would, on balance, be better served by granting access to the records. PLI responded to the Regulator on 1 June 2018, arguing that records 1-5 should be granted in part, and the remaining records refused in full.
On 15 June 2018, the Regulator decided that the records were exempt under sections 35(1)(a), 36 and 37 of the FOI Act but that the public interest weighed in favour of granting some of the information to which sections 35 and 36 apply.
On 29 June 2018, PLI made an application to this Office for a review of the Regulator's decision to grant the request in part. It said that further information should be redacted from records 1, 2 and 5 and that the remaining records should be refused in full. During the review, the Regulator amended its position on record 16.
I have now decided to conclude my review by way of a formal, binding decision. In carrying out my review, I have had regard to the above exchanges and to correspondence between this Office, the Regulator, PLI and the original requester. I should say that the arguments made are lengthy and detailed and while I do not intend to repeat them in full in this decision, I have given them all careful consideration. I have also had regard to relevant Clauses of the Licence, which the Regulator has published in part further to this Office's decision in Case No 150082. I have had regard also to the records considered by the Regulator and to the provisions of the FOI Act.
The Regulator categorised the 25 records as follows:
PLI's letter to the Regulator of 1 June 2018 did not object to its proposal to grant access to records 3 and 4 subject to the redaction of personal information under section 37. As PLI is aware, this review does not cover records 3 and 4 and, if it has not already done so, the Regulator should grant such partial access to those records without further delay.
Records 1 and 2 comprise correspondence between PLI and the Regulator regarding a Parliamentary Question (PQ) to the Minister in early 2018. Part of the PQ concerned the value of unclaimed prizes (i.e. where time limits for claiming prizes have expired) that have accrued to PLI since the commencement of the Licence in February 2014. PLI largely accepts the Regulator's decision on these records but objects to the grant of access to part of a sentence and one complete sentence from record 1, a complete sentence from record 2 (the same as the complete sentence in record 1) and details of expired unclaimed prizes to the end of 2017.
PLI objects to the Regulator's decision to grant access to a brief excerpt of the Appendix to record 5.
Records 16-18 are correspondence between the Regulator and PLI regarding PLI's requests for approval for matters relating to its scheme for calibrating and testing new Lottery ball sets (the scheme). While the Regulator decided to grant access in full to an attachment to record 16 comprising a draft scheme, it now says that details of specific tests and sample amounts should be withheld from that document.
Records 19 to 22 are correspondence between the Regulator and PLI regarding a request PLI made for approval in relation to draw based games lifecycles. Records 23 to 25 are emails from PLI to the Regulator regarding requests for approval for amendments to game rules.
Section 22(12)(a) of the FOI Act provides that the FOI body's decision to grant a request to which section 38 applies is presumed to have been justified unless the person to whom the records relate shows to the Commissioner's satisfaction that the decision was not justified.
At the outset, it is relevant to note a number of preliminary matters.
No party to a review has a right of veto over release of records.
Any review conducted under section 22 of the FOI Act is de novo, which means that it is based on the circumstances and the law as they pertain at the time of this decision.
While the FOI Act requires the Commissioner to provide reasons for decisions, section 25(3) of the FOI Act also requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. Thus, I cannot describe the records at issue in this case in great detail.
Section 18(1) provides, that "if it is practicable to do so", access to an otherwise exempt record shall be granted by preparing a copy, in such form as the head of the public body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). While the Regulator intends to grant partial access to the records, it should be noted that this Office takes the view that, generally, neither the definition of a record nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from such details for the purpose of granting access to those particular sentences or paragraphs.
Finally, the release of a record under the FOI Act is understood, effectively, to be equivalent to its release to the world at large.
In summary, the Regulator considers sections 35(1)(a), 36(1)(a) and 36(1)(b) to apply to the parts of the records that it decided to grant in the public interest. I take it that the Regulator does not consider section 35(1)(b) to apply to those details. PLI argues that the public interest does not weigh in favour of granting access to the details concerned and also that section 35(1)(b) applies to them, which provision it says does not require consideration of the public interest.
As already noted, this is a case to which section 38 applies. I have considered the fact that an FOI request only falls within the ambit of section 38 if it is one "to which section 35(3) or 36(3) applies or to which section 37(5) applies and which, apart from this section, would fall to be granted" [emphasis added]. In other words, exemptions which are not subject to those subsections are generally not relevant in section 38 cases. Section 35(3) applies the public interest balancing test to section 35(1)(a) and not to section 35(1)(b).
In previous decisions, e.g. Case 98049 (Henry Ford & Sons Ltd, Nissan Ireland and Motor Distributors Ltd and the Office of Public Works (1999), available at www.oic.ie), this Office has acknowledged the overlap between the confidentiality requirements of the then equivalent of sections 35(1)(a) and (b). I am satisfied that in the circumstances, I should consider both of these provisions.
Before I consider the parties' various arguments regarding the confidentiality and commercial sensitivity of the information under review, I will address PLI's argument to the effect that certain records should be refused under section 15(1)(d) (information in the public domain).
Section 15(1)(d)
Section 15(1)(d) may be relied on to refuse to grant a request where the "information is already in the public domain". PLI's position is that records 6, 7, 9, 10, 11, 12, 13, 14, 15 and 16 are in the public domain because the Regulator has published information about various requests for approval submitted to it by PLI from 2014 to February 2018. The published details comprise a brief description of the game or service the subject of the requests, the section of the National Lottery Act under which approval is sought, whether the proposal was amended or further information sought and whether the approval process is ongoing or whether the request has been withdrawn, ultimately approved or ultimately refused.
Firstly, only a decision making FOI body can rely on a discretionary exemption such as section 15(1)(d). Furthermore, the fact that certain information has been published does not of itself mean that a record containing similar or related information is exempt under section 15(1)(d). In any event, as I have explained above, my review in this case is confined to considering sections 35 to 37 of the FOI Act. Thus, I have no basis to consider section 15(1)(d) in this case. However, I will have regard to the details published by the Regulator in considering relevant public interest tests.
Sections 35(1)(a), 35(1)(b), 35(2), 36(1)(a) and 36(1)(b) - general
Section 35(2) dis-applies section 35(1) in certain circumstances. It provides that subsection (1) shall not apply to a record which is prepared by a head or any other person (being a director or staff member of an FOI body or a service provider) in the course of the performance of his or her functions "unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than an FOI body or head or a director, or member of staff of an FOI body or of such a service provider."
I accept that PLI is not a service provider within the meaning of the FOI Act. Accordingly, it is possible for section 35(1) to apply to the records.
Section 35(1)(a) must be applied to a record containing information that was:
Section 35(1)(b) must be applied to a record where granting it would constitute a breach of a duty of confidence provided for by an enactment other than by certain provisions of particular enactments specified by the Act, an agreement or otherwise by law (i.e. an equitable duty of confidence).
Section 36(1)(a) must be applied to a record containing trade secrets. The Commissioner has accepted that a trade secret is information used in the trade or business which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret and that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.
Section 36(1)(b) must be applied to certain types of information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation. The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release.
The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.
The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the "could reasonably be expected" test in the first part of this exemption. However, this Office takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
In the High Court case ofWestwood Club v The Information Commissioner [2014] IEHC 375 Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position.
Section 36(2) provides for a number of exceptions to section 36(1), while section 36(3) provides that a record to which section 36(1) applies may be granted if the public interest would, on balance, be better served by granting than refusing to grant the request.
Records 1 and 2
The sentences at issue comprise a comment that the Regulator proposed to include in information it was giving to the Minister regarding the PQ (which I take to be Nos 62 and 63 of 2018) and PLI's view on the Regulator's comment. PLI's letter to the Regulator of 1 June 2018 says that these comprise its confidential, commercial views and reflect its confidential strategic considerations.
The Regulator's decision says that the redactions are unnecessary because they are contained in the Minister's reply to the PQ, which is in the public domain. Thus, it appears to take the view that sections 35 and 36 do not apply.
In arguing that section 35(1)(b) applies generally in this case, PLI refers to Clause 20.6 of the Licence, which provides that:
"Notwithstanding anything to the contrary in this Licence, the Regulator shall:
not, unless compelled to do so by law (in which event the Regulator shall forthwith notify the Licensee of such compulsion in writing), under any circumstances directly or indirectly disclose or divulge to any third party any of the Licensee's confidential information which may be provided to the Regulator pursuant to any provision of this Licence and/or the Act, without the prior written permission of the Licensee. The Licensee's confidential information shall include, without limitation, the Licensee's trade secrets, management accounts, financial structure, financial statements (whether audited or not), commercial plans, contractual arrangements with any third party, shareholders agreements and arrangements and details of the Licensee's human and other resources, management, policies and procedures unless such information is already in the public domain. The foregoing shall apply mutatis mutandis to any other confidential information of a third party provided by the Licensee to the Regulator".
I have examined the response to PQ Nos 62 and 63 of 2018 and am satisfied that it contains the Regulator's proposed comment. Given that this comment is in the public domain, I do not consider it to comprise confidential information for the purposes of Clause 20.6 that would be exempt under 35(1)(b). In such circumstances, further to section 35(2) (described above), section 35(1)(a) cannot apply. I do not consider it to be information that is exempt under section 36(1)(a) or (b), either.
I have no reason to consider that disclosure of PLI's view on the Regulator's proposed comment would be likely to prejudice the giving to the Regulator of further similar information from PLI or other persons (the third test of section 35(1)(a)). Accordingly, section 35(1)(a) does not apply. Neither do I consider it to comprise confidential information for the purposes of Clause 20.6 that would be exempt under 35(1)(b) or information that would qualify for exemption under section 36(1)(a) or (b).
I find that access should be granted to the partial and complete sentences.
Record 1 - amounts of expired unclaimed prizes
Clause 6.9 of the Licence generally concerns the treatment of unclaimed prizes and their ultimate forfeiture to the licensee (PLI) for use within 365 days of forfeiture, solely for the promotion of the National Lottery and/or the Lottery Games (excluding Base Marketing, defined by Clause 1.1.9 as marketing expenditure that is fundamental to the promotion and operation of the National Lottery in the normal course).
The Regulator does not consider that disclosure of the amounts of expired unclaimed prizes would breach the contractual duty of confidence it owes to PLI further to Clause 20.6 of the Licence such that section 35(1)(b) applies. It says that because the National Lottery Act 2013 requires PLI to provide the Regulator with such information as may be required, the details do not meet third test of section 35(1)(a). However, it considers them to be exempt under section 36(1)(b) and that the public interest warrants their disclosure.
I will deal first with certain general arguments made. As the Regulator's decision says, the matter of whether information is exempt under the FOI Act is an entirely separate matter to whether information must be given in a response to a PQ, and the mere labelling of records as confidential does not of itself impose an obligation of confidence regarding the records concerned.
However, I do not agree with the Regulator's view that "the information referred to in Clause 6 ... does not constitute confidential information (as it is published in full)". It seems to me that a distinction can be drawn between the confidentiality or knowledge of details governing how expired unclaimed prizes are to be treated and the confidentiality or knowledge of the amounts concerned. I note that the Regulator considers PLI's disclosure of approximate details of the value of expired unclaimed prizes (i.e. as a percentage of total sales) to differ from making the actual totals publicly available.
While PLI refers to past adverse publicity about the expired unclaimed prizes, I cannot take this or any future publicity into account. Furthermore, the publication by the Regulator of certain information does not mean, of itself, that disclosure under FOI of further details regarding the Regulator's discharge of its functions cannot be required.
Finally, the original requester says that PLI generally seeks to invoke Clause 20.6 regarding all information it provided to the Regulator. However, I must deal with the particular information under my review. If I am satisfied that information is covered by Clause 20.6, I am required to find section 35(1)(b) to apply.
Section 35(1)(b)
The Regulator's decision explains why it does not consider itself to owe an equitable duty of confidence to PLI in relation to the details concerned, and notes that PLI made no arguments in this respect. Given that PLI made no such arguments to this Office either, I see no reason to consider whether an equitable duty of confidence exists in this case.
The decision also says that PLI did not explain how the details comprise confidential information within the meaning of Clause 20.6 of the Licence (i.e. such that there exists a duty of confidence provided for by an agreement). In any event, it goes on to consider the categories of confidential information listed in the Clause. In particular, it says that while the figures may feature in PLI's management accounts, they are not of themselves management accounts. Finally, it says that the details are directly related to the fee payable under the Licence and amount to a concession or benefit in kind to PLI whereby the funds generated by virtue of clause 6.9 rather than by PLI's sales must be used to promote the National Lottery and ultimately increase sales and contributions to good causes. It says that the amounts cannot constitute PLI's private financial information and it is not bound by a duty of confidence further to Clause 20.6.
PLI says that details of expired unclaimed prizes comprise confidential information for the purposes of Clause 20.6 of the Licence, that there is no legal compulsion to disclose them and that they are thus exempt under section 35(1)(b). It says that any financial figure not disclosed in its audited financial statements is confidential and that details of unclaimed prizes are "a constituent element of its management accounts".
PLI also says that the licence fee was a one off payment it made in the context of a public competition for the grant of the licence and that the definition of expired unclaimed prizes and their treatment under Clause 6.9 was negotiated following PLI's successful bid. It says that expired unclaimed prizes are not directly related to the one off payment of the Licence fee, and are not a set amount and vary from year to year. In this regard it says that although "expired unclaimed prizes are applied by operation of Clause 6.9 of the Licence, the flow of funds to PLI is not part of that clause."
It also says that its competitors may use forfeited prizes in whatever way they choose e.g. as a contribution to shareholder dividends. However, the Licence requires it to minimise the number of unclaimed prizes, which it does by publishing information on its website and conducting high-profile awareness campaigns. It also says that the monies do not go into PLI's revenues but are used solely for the purposes of marketing activities and further protecting the long term sustainability of the National Lottery with strict conditions attached that include regulatory oversight. Thus, its position is that PLI does not benefit from the flow of funds and that it must still allocate a certain amount of budget each year for marketing activities. On that basis it says that the relevant monies are not a benefit in kind.
However, I note that PLI also says that while knowledge of the proposed treatment of unclaimed prizes during the bidding process was not the decisive factor determining the size of PLI's bid, it was one of the many relevant issues.
The requester says that the previous licence required expired unclaimed prizes to be returned to general prize funds. He agrees with the Regulator's view that the sums involved should be seen to be a benefit in kind and that disclosure is in the public interest.
I accept that the examples of confidential information listed in Clause 20.6 are not exhaustive, as indicated by the use of the phrase "shall include". However, this does not of itself mean that I should find particular information to be confidential information simply because PLI claims that this is the case, or because there may be no legal compulsion for PLI to give such information to the Regulator. That said, in general terms, I accept that the purpose of Clause 20.6 is to protect information that PLI provides to the Regulator about its own private financial and commercial affairs and those of third parties with which PLI engages.
At this point it is worth putting the information at issue into context. The National Lottery Licence is a State Asset that was sold for an up front fee of €405 million in 2014. Previously, expired unclaimed prizes were returned to general prize funds. As PLI has explained, the terms of the Licence negotiated with the Regulator in 2014 permit it to use expired unclaimed prizes for promotion of the National Lottery and/or the Lottery Games. PLI also says that its bid was informed to some extent by its intention to try to subsequently negotiate the concession that is now contained in Clause 6.9.
I accept that the actual amounts involved are subject to many factors outside PLI's control. I also accept that the activities resulting from their use have potential to raise awareness of the National Lottery generally and increase the funds available to good causes, and that PLI must allocate its own funds toward other marketing activities. However, I do not accept that Clause 20.6 requires confidentiality regarding the monetary extent of such negotiated financial concessions, regardless of whether such amounts feature in PLI's management accounts. I agree with the Regulator's view that the amounts concerned are not the Licensee's private information. Clause 20.6 does not, it seems to me, operate to protect arrangements as to the management of the Licence.
Having considered all of the above, I agree with the Regulator that the amounts of expired unclaimed prizes are akin to a benefit in kind. In the circumstances, I do not consider the amounts to comprise confidential information for the purposes of Clause 20.6 such that the relevant information is exempt under section 35(1)(b).
Section 35(1)(a)
I have no reason to consider that disclosure of the amounts would be likely to prejudice the giving to Regulator of further similar information from PLI or other persons. PLI acknowledges that it is in its interests to provide information that has been requested by the Regulator in performing its functions and also that Clause 20 of the Licence requires it to do so. However, it emphasises that on occasions it voluntarily provides information to the Regulator and says that it would be dis-incentivised from doing so in future if the details at issue were to be disclosed.
I do not see it as relevant to my consideration of the third test of section 35(1)(a) whether further similar information needs to be given formally or informally. I have no reason to consider that PLI would not give further similar information even if the Regulator had to ask for it on a formal basis. I find that the third test is not met and that section 35(1)(a) does not apply.
Sections 36(1)(a) and (b)
PLI's application to this Office says that details of amounts of expired unclaimed prizes comprise its trade secrets but does not expand on this view. Its submission does not seek to argue that section 36(1)(a) applies and I see no reason to consider this provision accordingly.
In arguing that section 36(1)(b) applies, PLI says that disclosure would prejudice its competitive position with regard to what it says is an increasing number of unlicensed competitors, whom it says would be "able to reverse engineer the funds available to PLI for promotional activities, meaning that they could glean learnings of how to optimise allocation of revenue to marketing for the purpose of maximising sales." It also says that those who provide services to PLI in relation to the promotion of the National Lottery would be able to calculate PLI's budget for such activities, and thus PLI would not be able to get competitive prices from them. PLI argues that disclosure of the record without the figures would demonstrate the Regulator's exercise of its functions. The Regulator accepts PLI's views on the application of section 36(1)(b) but has not explained to this Office why it accepts that the outcomes envisaged by PLI could happen.
I agree with the original requester's view that expired unclaimed prize funds are only a portion of PLI's existing and unknown total marketing budget and that PLI has not explained how disclosure of the figures would enable competitors to understand how to optimise allocation of revenue to marketing for the purpose of maximising sales.
I accept, in general terms, that disclosure of one's budget for a particular project gives an advantage to third parties that are tendering for or negotiating terms relating to the project. However, PLI has not explained how any third parties, with which it may be currently engaging or with which it intends to engage in the foreseeable future in relation to marketing activities (whether of the sort required by Clause 6.9 or other marketing activities), could use figures for expired unclaimed prizes from 2014 to 2017 to estimate the budgets for the projects concerned. In particular, Clause 6.9 requires forfeited prizes to be used no later than 365 days from the date in which they were forfeited in favour of PLI. It has not been explained how the amounts for 2014-2017 have any relevance to PLI's current or future budgets for Clause 6.9 marketing or other marketing activities. Neither has it been explained how one could accordingly estimate the amounts currently available for such marketing activities, particularly when the amount of unclaimed expired prizes in any one year is a matter of chance. I find that section 36(1)(b) does not apply.
I find that the requirements of section 36(1)(b) have not been met and that access should be granted to the amounts of expired unclaimed prizes as contained in record 1.
Record 5
PLI says that disclosure of the excerpt of the Appendix to this record would reveal part of its security procedures for verifying the validity of a claim. While the original requester says that PLI does not seem to have explained how the disclosure of any information could lead to fraudulent claims, it is not possible for me to give any further explanation in relation to record 5 without disclosing the information and breaching section 25(3). I accept that such disclosure would confirm an element of PLI's security processes for validating claims and weaken the efficacy of the processes concerned. I accept that this could prejudice PLI's competitive position in the conduct of its business and I find that section 36(1)(b) applies.
I do not consider section 36(2) to be relevant. In relation to section 36(3) and on the matter of where the public interest lies, I have had regard to the comment by the Supreme Court in the Rotunda case that a public interest is "a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law". Although this comment were made in relation to another provision of the FOI Act, I consider it to be relevant to consideration of public interest tests generally.
The Regulator considers that the public interest weighs in favour of granting the various details under my review because disclosure would enable the public to see how it performs its functions and assess whether they are being discharged properly. PLI says that such disclosure is not in the public interest because it could undermine the security and integrity of its operations, damage its interests and those of the National Lottery and also impact on monies payable to good causes.
The original requester says that there is a public interest in disclosing the information that the Regulator decided to grant. He makes a number of arguments that are more relevant to other records and which I will outline in that context. Otherwise, however, he says that games operated by PLI are a form of gambling and that there is a need to understand how such games are regulated. He says that the National Lottery is a state-supported form of gambling involving vast quantities of money and that it is in the public interest to ensure that PLI is regulated properly and in demonstrating that the Regulator is doing so.
I accept the applicant's view that there is a general public interest in this case in promoting openness and accountability regarding how the Regulator carries out its functions. The Regulator was clearly acting in the spirit of the FOI Act by deciding that the public interest requires the disclosure of the details under my review. It seems to me that granting access to the particular excerpt would promote openness and accountability regarding how the Regulator carries out its functions by disclosing an aspect of PLI's proposal that the Regulator took into account.
On the other hand, section 36(1)(b) itself reflects the public interest in the protection of records containing information that could prejudice a private company's competitive position in the conduct of its business. While the applicant may consider that withholding the information under my review will "exclude any effective oversight of the Regulator itself", this Office takes the view that the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations and, in general terms, it was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny. Furthermore, while the applicant says that the National Lottery is a form of gambling, the fact that the Oireachtas passed the National Lottery Act 2013 indicates that there exists a true public interest in protecting the interests of the lottery and by extension those of PLI, which would extend to information concerning PLI's security processes. It seems to me that the weight of the public interest in withholding the details is considerable in the circumstances.
On balance, I do not consider that the public interest in favour of granting access to the excerpt from record 5 outweighs the public interest in favour of refusing it.
Records 6-25
Generally speaking, the details that the Regulator decided to grant from these records include descriptions of PLI's proposed schemes for lottery games and game themes, game and prize plans, commercial strategies, technical processes and specific controls.
Section 36(1)(b)
The Regulator says that while PLI is the only entity licensed to operate the National Lottery on behalf of the Minister and is subject to the requirements of the 2013 Act and the Licence, it is subject to market competition in the normal way. It says that a "significant number of competitors" that are not subject to the 2013 Act or the Licence compete directly with PLI. The Regulator says that these competitors could benefit commercially from disclosure of the details by, for instance, developing and launching games based on PLI's proposals. It says that disclosure of certain details could facilitate cheating, which could cause material financial loss to PLI or prejudice its competitive position in the conduct of its business. It considers that such outcomes would adversely impact on the reputation of the National Lottery and its long term sustainability. PLI also considers section 36(1)(b) to apply.
The original requester says that without some knowledge of what is in the records, it is difficult for him to comment on section 36; he acknowledges that some details such as prize plans may be commercially sensitive. However, he disputes that PLI, being the sole regulated body, faces strong competition. He says that legislation is proposed that will remove indirect competition from companies offering odds on the outcome of draws. He does not accept that details of PLI's proposed games would be of use to its competitors because PLI has in his view had plenty of time to resubmit fresh applications if it had chosen to do so. He also says that the Regulator's revision of its position on record 16 may be as a result of representation or pressure from PLI. As already mentioned, he contends that PLI has not explained how the disclosure of any information in the records could lead to fraudulent claims.
I see no reason not to accept the Regulator's views regarding PLI's competitors. I accept that he has a special expertise in this matter given his statutory functions. It seems to me that details of PLI's proposals and/or its supporting submissions will directly and/or indirectly disclose aspects of PLI's commercial plans to its competitors.
Some of the other details that the Regulator decided to grant are directly or indirectly critical of PLI and/or its proposals. Some are couched in terms of the Act under which the Regulator performs its functions, while others specifically refer to PLI's proposals. I accept that disclosure of such comments could impact on PLI's reputation and could prejudice its competitive position in the conduct of its business. However, it seems to me that criticisms couched in terms of the relevant legislation are likely to have less commercial impact on PLI than criticisms about its specific proposals. Similarly, certain details in the records that relate to PLI but which are more indicative of the Regulator's actions would seem to me to be less likely to impact on PLI if access was granted to them.
In so far as record 16 in particular is concerned, it seems to me that the Regulator revised its position further to its consideration of PLI's application to this Office, which, as required by the FOI Act, this Office copied to the Regulator. Furthermore, I accept that disclosure of a scheme for calibrating and testing new Lottery ball sets could facilitate fraudulent activity by enabling third parties to interfere with the process and could prejudice PLI's competitive position in the conduct of its business.
I find that all of the above information is exempt under section 36(1)(b). I will refer to this in the rest of this decision as "the commercially sensitive information". There is no need for me to consider PLI's arguments regarding section 36(1)(a) in the circumstances.
Exceptions to section 36(1)(b) - sections 36(2) and (3)
I do not consider section 36(2) to be relevant.
I have already set out my approach to the matter of where the public interest lies (section 36(3)) and some of the public interest arguments made. In addition, the requester says that there is a public interest in understanding how and why PLI seeks to change rules or introduce new games given the large percentage of adults who regularly play Lottery games. He says that the information published by the Regulator is limited. He says it is in the public interest to know why the Regulator has refused some applications and to know if PLI is regularly and systematically trying to push the boundaries of activities that could be regarded as encouraging gambling. He says that PLI is lobbying politicians to regulate competitors that he says in some cases it unfairly brands as unregulated and that its opposition to the grant of the records is part of this strategy.
I have already explained why I do not consider the applicant's views on the National Lottery as a form of gambling to weigh in favour of granting access to exempt information. The fact that the information may be of interest to the large numbers of people who play Lottery games does not equate to a true public interest in its disclosure under FOI. Furthermore, any lobbying in which PLI may have engaged in other arenas does not of itself require me to direct the Regulator to release the commercially sensitive information.
While I accept that the information published by the Regulator is limited, such publication nonetheless serves to some extent the public interest in favour of granting this part of the request. I accept that the more detailed commercially sensitive information would further serve this public interest by, for instance, disclosing those aspects of PLI's proposals with which the Regulator took issue and its reasons for so doing.
I adopt the same analysis of the public interest in favour of refusing access to these details as set out above when dealing with record 5. In my view, there is considerable weight attached to the public interest in protecting the details of PLI's commercial plans, having regard to the public interest reflected by section 36(1)(b) and the National Lottery Act 2013 in protecting the interests of the PLI and the lottery itself. On balance, I consider that the public interest weighs in favour of refusing access to such information.
However, I have already said that the grant of access to certain other exempt details (i.e. material concerning the relevant legislation and details that relate more to the Regulator's actions than to PLI,) seems likely to have less commercial impact on PLI than if access was to be granted to details of its plans. There attaches less weight to the public interest in refusing access to such details, accordingly. On balance, I consider that the public interest weighs in favour of granting access to such information.
The remaining information in records 6-25
The remaining information that the Regulator decided to grant from records 6-25 is general. I do not consider the details to comprise confidential information further to Clause 20.6 that is exempt under section 35(1)(b). In such circumstances, further to section 35(2), section 35(1)(a) cannot apply to any comments made by the Regulator. I do not accept that disclosure of the remaining information in the records, in the absence of information that I have directed to be withheld in the public interest, would be likely to prejudice the giving to the Regulator of further similar information from PLI or other persons. I find that section 35(1)(a) does not apply to such information. I do not consider the remaining information to comprise trade secrets for the purpose of section 36(1)(a) and neither do I find it to be exempt under section 36(1)(b).
Summary of findings as applied to records 6-25
In deciding the extent to which I should direct that access be granted or refused (as appropriate) further to the above findings, I have also given careful consideration to the application of section 18. I accept that in the absence of some of the commercially sensitive information, the disclosure of certain other information would be misleading which would dis-apply section 18. Furthermore, as explained earlier, this Office does not generally direct that access be granted to particular sentences or occasional paragraphs of records.
In relation to those details in records 6-25 covered by my review (i.e. the details that the Regulator decided to grant), I find that access to the following should be withheld:
Record 6: the details the Regulator proposed to grant from the second heading on page 1 to the start of the final heading on page 2.
Record 9: the details the Regulator proposed to grant from the second last paragraph, except for the final seven words.
Record 11: the details the Regulator proposed to grant from the final heading on page 2 to the start of the final heading on page 12.
Record 12: the details the Regulator proposed to grant from point 1. on page 2 to the start of the final paragraph on page 6.
Record 13: as record 12.
Record 15: the details the Regulator proposed to grant from the first heading on page 2 (i.e. in italics and underlined) to the end of page 7 (i.e. the end of the second last page).
Record 16: the attachment in full.
Record 17: the email from the Regulator to PLI.
Record 19: the second, third, and fourth paragraphs.
Record 21: the second paragraph.
Having carried out a review under section 22(2) of the FOI Act, I vary the Regulator's decision.
In relation to those details covered by my review (i.e. the parts that the Regulator decided to grant), I find that section 36(1)(b) applies to the excerpt of the Appendix to record 5 and to some of the information in records 6-25. I find that the public interest weighs in favour of withholding access to the following information:
Record 5: the brief excerpt from the Appendix.
Records 6, 9, 11, 12, 13, 15, 16, 17, 19, and 21: the parts listed above.
I direct the Regulator to grant access to the rest of the information covered by my review. It follows that the Regulator should also grant access to those parts of records 1, 2, and 5 that it decided to grant and to which decision PLI did not object.
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated by the requester not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.
Elizabeth Dolan
Senior Investigator