Fortescue’s bid to protect price data takes a hit in UK court
Fortescue Metals Group has lost the first round of its bid to block publication of some of its price data.
Fortescue Metals Group has lost the first round of its bid to block publication of some of its price data, with the UK High Court of Justice throwing out an interim publication injunction imposed on benchmark pricing providers Platts and Argus.
Fortescue won temporary orders from the British courts on April 24 preventing the pair from publishing “confidential” information about the discount from the benchmark received by Chinese customers for its ore.
While the action is ongoing, the High Court threw out the interim injunction on Friday, with judge Robert Miles ruling Fortescue had not established that it was “more likely than not to obtain a permanent injunction at trial”.
Fortescue had argued the pricing of discounts to the benchmark index in long-term contracts was a “trade secret” and subject to confidentiality provisions with its customers, and that Platts and Argus should be restrained from publishing the details even though the media outlets were not subject to the confidentiality provisions.
The company argued publication of the discounts would hinder its ability to negotiate new long-term contracts “openly and properly” with customers.
But Justice Miles said it appeared Fortescue’s real concern was to keep the extent of its discounting from its competitors.
“The claimants’ real concern appears to be not so much that disclosure of the discount would hinder their ability to negotiate new contracts or perform existing contracts with customers.
“It is that the claimants would prefer their competitors not to know their discount as this might lead to undercutting,” he said in his judgment.
Justice Miles said the two media outlets served an “important and weighty public interest” in providing well-informed analysis and data on the iron ore market.
“The price reporting agencies do not publish the actual terms of long-term contracts, but the amount of the discount does provide buyers with important information about market trends. Large buyers (and prospective buyers) are able to find out the amount of the current discount from FMG itself, but smaller spot buyers are not in the same position,” he said.
“The information provided by the price reporting agencies is used by very wide range of readers, from buyers and sellers, to governments, regulators and academics. Their decisions depend on being well informed, and that depends on reporters having access to the widest possible range of data.”
Fortescue is understood to still be weighing whether it would push ahead with the action against Argus and Platts, but chief executive Elizabeth Gaines said she was disappointed the injunction had been lifted.
“We are disappointed with the outcome of the UK High Court of Justice decision, which declined to grant immediate interim protection of our customers’ confidential contract pricing information,” she said.
“We are, however, very pleased that the court agreed with Fortescue that our customers’ contract pricing is confidential. Protecting that confidentiality was one of the key reasons Fortescue commenced these proceedings.”
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