E.I. Dupont De Nemours & Company

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IN THE MATTER OF E.l. DUPONT de NEMOUHS & CO.

Ducket /1/08. Interlocutory Order. Jan. 981 ORDER EXTENDING IN CAMERA TREATMENT On January 16, 1980, E.I. Dupont de Nemours and Company Dupont") requested a three year extension of in camera treatment for certain documents in the record of this proceeding'- By order of October 20 , 1980, the Commission ordered that in camera protection of aU documents so designated should continue unti certain questions on which the Commission requested additional information are resolved. Respondent has submitted its response to that order and the Commission is now prepared to rule on the requested extension.

The Commission s standards for in camera protection of exhibits in adjudicative proceedings are clearly expressed in H.P Hood Sons, Inc., 58 FT. C. 1184 (1961); Bristol-Myers Company, 90 F. C. 455 (1977); and General Foods Corporation Docket No. 9085, Order of March 10, 1980. Despite respondent' s arguments to the contrary, the provisions of the F. C. Improvements Act of 1980 (Pub Law 96-252) governing treatment of confidential information do not alter the long-established fact that Section 6(1) of the Federal Trade Commission Act does not absolutely bar disclosure of business data as evidence in our adjudicatory proceedings.

The standard for in camera treatment is one of "clearly defined serious injury. H.P Hood Sons, Inc., 58 F. C. at 1188. We pointed out in Bristol-Myers Co. 90 F. C. at 457 and in our March 10 Order in General Foods that the secrecy and materiality of the business information sought to be protected comprise the two elements of the serious injury analysis. As aids in the determination of secrecy and materiality, the Commission in Bristol-Myers cited six factors mentioned in the Restatement of Torts. 90 F. C. at 457. Furthermore, we have acknowledged that the showing of serious injury does not necessarily require a specific demonstration of the manner in which other firms would use material to the disadvantage ofthe firm New Section 21(d)(:e) 01 tht- FTC Act provides th,, (Qjny disclo ur" "I' rdeVfmt Elnd materi,d information in adjudicative proceedings to which the Commission isap"rtyshall be governed by the rulesoflhe Commission foradjudicativeprocee dings. . except that the rul"" 01' the Commissi"rJ shall not be amended in a m1Jnner inconsistent with the purposes of this SBctiun Discussing what ultimately 'HIS enacted as S"ction 21(d)(:e). the Senate Report on S, Ill stOlted specilically that tho' ClHnmissiol1 should maintain the proc"du"" in Rules \. lH(h) and ;1, 4;1 lor granting camerain treatment Senate Report NCJ !)I;-,,(lI! at pp- :! - ;!K (! t;.1. UUt'Ul T df' Nt:MUlHG:: &. cu. 11' 116 Interlocutory Order whose information is at issue. Rather, we have said that it is proper a -competitor would use-it;to infer, without a specific showing of-how that disclosure of allegedly sensitive information would seriously affect the firm s commercial position. Underlying this analysis is a general concern for the seriousness of injury to a firm s commercial or competitive position. Of course, the injury contemplated in Hood and its successors is not limited to "commercial" injury in any strict or exclusive sense, nor is such injury confined to the precise type under consideration in Hood, but our precedents appear to distinguish it from the kind of injury arising from potential tax liability envisioned by respondent.

In essence, respondent argues that certain earnings data should be given extended in camera treatment because of the possibility that the firm. Indisclosure would result in increased tax liability for Hood the Commission weighed the possibility that disclosed data might give rise to and be used in private treble-damage actions, and it concluded that such an eventuality was not the kind of injury that should govern its determination of whether to disclose the information. As such, it appears that respondent's potential tax liability is more like the potential private damage liability in Hood and less like contemplated by our in camerathe type of direct business injury standards. Nevertheless, it is unnecessary for us to make a definitive determination on this point inasmuch as respondent advances an , ground for continued in cameraindependent, and we think valid treatment of the same information to which its tax argument applies.

The exhibits in question contain valuable, secret and material investment, earnings, profit, operative return and cost information about respondent's titanium dioxide and pigments business, the release of which might enable DuPont's competitors to construct an accurate financial model of Dupont' s business, to its detriment. While it appeared to the Commission that certain information question had been previously disclosed in public exhibits, respondent points out that the in camera data in question are actual while the prcviously disclosed data were only projections and forecasts. Dupont asserts, and we are persuaded, that the actual data were expensive to compile, are more sensitive and secret than the projections and are more likely to result in injury to respondent' business if released.

The Commission also asked Dupont for clarification of the status of certain in camera information that appeared to be too old to be of , General t'oods Corporation. Docket No.)(K,, Order of August 1. l kl), pp 1- JJK FEDERAL TRADE COMMISSION DECISIONS Interlocutory.Order 97 F. competitive concern. Respondent has persuaded us that, despite its age (1975), the actual data in question- trends of profits, earnings unit costs and sales volumes of tiianium dioxide-might enable competitors to extrapolate an accurate model of its current business. We also asked for further argument concerning certain comparisons of costs of production by plant. Dupont asserts that this information is more recent, more detailed and more accurate than similar information apparently disclosed in other exhibits and that this information is highly proprietary and sensitive, having been developed at substantial expense to Dupont. The Commission finds this a sufficient ground for extending in camera protection for the plant data. Finally, the Commission inquired about certain lists of prices for 1976, 1977 and 1978. Respondent contends that these exhibits contain indexed averages of actual discounted prices which are secret and which would assist its competitors if released. We are persuaded that this group of documents should also be given continued in camera treatment.

Having disposed of the specific groups of documents discussed in in camera record ofour October 20 Order, we now move to the whole this proceeding. We have found it unnecessary to disclose any of the in camera information in writing our opinion in this case, which is a primary consideration in determining whether to grant in camera 58 F. T. C. attreatment to adjudicative information or to disclose it, 1187. Moreover, we have carefully reviewed each of the documents for which respondent seeks extended in camera treatment and are satisfied that all of them meet the criteria set out in the holdings cited above. Therefore in camera record of It is ordered That all exhibits presently in the Docket No. 9108 shall remain in camera for three years from the date of this order, at which time respondent may show cause why those documents should not be made public.

,, \JJ.' H'I .l.l l1!J Complaint