Wednesday, October 27

The Government hides behind the privacy of businessmen to make it difficult to access commercial data

In Spain, the law requires companies to deposit a series of documents in the Mercantile Registry, such as their accounts, their debts or the people who constituted the company. By doing so, the data contained in these documents becomes public information. One of the missions that the law entrusts to the Commercial Registry is to “publicize” that information. However, access to them is not free, since to consult them it is necessary to pay a fee to the registrars, in addition to the one already paid by companies when depositing them.

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That consultation fee is a legacy of the early twentieth century. It was created to compensate for the effort involved at that time to give access to a certain document: it was necessary to find out in which volume of the Mercantile Registry the requested data was found, go find it, copy it and deliver it. In fact, the last variation in the price of fees was approved in 1973, during the Franco era. Only security forces and judicial investigators are exempt from payment.

As explained in this report, this access fee has survived until the digital age and is increasingly criticized by transparency organizations and specialists in ‘big data’. They allege that paying registrars for each individual query (about 9 euros for each simple note) prevents scrutiny of civil society and the fight against corruption by individual citizens, associations, academic researchers or journalists. It also blocks the use of artificial intelligence tools that could detect suspicious relationships in company data, such as the network of 700 companies to evade taxes that television producer José Luis Moreno and his partners allegedly created, for example.

This media asked the Ministry of Justice why Spain has not converted its Mercantile Registry into a free access database, as other European countries have done. His response, received a month after the publication of the report, is that what prevents this public supervision of company data is the privacy of businessmen.

“The database of property and commercial registers are not open access databases, but are subject to legitimate interest control by the registrar, who has to ensure compliance with data protection legislation “, allege sources of Justice. “Thus, there is no room for investigation on patrimonies or cross-information of companies (number of positions on boards of directors, number of companies in which real ownership is held), and so on.”

From the “data economy” to the banned Mercantile Registry

This Wednesday, President Pedro Sánchez has once again defended the importance of the “data economy” in the presentation of the three data centers that IBM will open in Spain. Digitization is one of the fundamental pivots of the Spain 2050 strategy or the recovery plan for coronavirus funds, which will dedicate some 35,000 million euros to this section. Other key roadmaps for the Executive, such as the National Artificial Intelligence Strategy, also advocate facilitating the access and reuse of data as an “economic engine” in itself.

Asked whether blocking free access to the Mercantile Registry does not represent a contradiction with the Government’s long-term strategy, the Ministry headed by Pilar Llop alleges that commercial data belongs to a special category. “The data of the property and commercial registers are not among the free access data referred to in the National Artificial Intelligence Strategy, as they are not free circulation or among the recyclable or reusable public data, as they are subject to to the data protection legislation whose control corresponds to the registrars “, they affirm.

The government’s position has surprised transparency organizations. The argument of Justice based on data protection collides with the reality of commercial registrars, which in practice provide information to anyone who requires it. The only requirement is to pay. The private companies that charge for providing data present in the Registry do not ask what is the interest of the applicant.

Civil society needs to be informed and now only a few, those who can pay, have access

Patricia gonzalez
– Access Info

“It should not be forgotten that the information belongs to a public registry, not to the registrars, whose main function is to ensure that the information contained in the registry is authentic”, highlights Patricia González, from Access Info, an organization dedicated to promoting the right of access to information in the EU. “The use, or rather, the abuse of the application of the protection of personal data does not make sense when the information is delivered to all those who pay the corresponding fee, since exactly the same information that is sold is susceptible to being opened to anyone who requires it, “he adds.

“The commercial registry contains relevant information for the fight against corruption or the mismanagement of public resources, matters of public interest that go beyond the legitimate interest of the registrars on the control of information”, continues the expert: “Society civil needs to be informed and now only a few, those who can pay, are those who have access. ”

Lawyers specializing in data protection also disagree that this regulation prevents citizens from having access to the entire Commercial Registry. “The accounts of a company, how many taxes they pay, if they have five, eight or no workers or how many offices they have, is information that is exempt,” explains Samuel Parra, lawyer at the consultancy specializing in data protection Aegis.

What the regulations establish, Parra details, is that in order to process the data of the people contained in the Mercantile Registry, it is necessary to have a legitimate interest. A use protected by legitimate interest? A citizen who crosses business data with public procurement data to discover cases of corruption, for example. One that is not? Include those names, along with their addresses or telephone numbers, in commercial databases intended for advertising.

“Opening the Commercial Registry would not be an a priori problem for data protection because a basis of legitimacy is already established in the regulations, provided that what is indicated in that article 19 is respected [sobre el interés legítimo] and the rest of the data protection regulations, of course “, says the lawyer.

Europe forces Spain to lower rates

The Government has not only spoken of the need to facilitate access to public data such as commercial data in general strategic plans. He has also specifically cited the lack of transparency of the Mercantile Registry in the IV Open Government Plan: “In Spain currently the information is available only to those people who pay to obtain it, creating discrimination and inequality in access to information”, cites the document, prepared by the Ministry of Territorial Policy and Public Function.

The roadmap that establishes this plan is the European directive on digital tools and processes in the field of company law. This norm dictates that the states must make a large part of the data contained in the mercantile registers free of charge, such as the registered office of the companies and the country in which they are registered, legal form or status of the company (if it has been closed, deleted from the registration, dissolved, liquidated or is economically active or inactive).

The fees charged by the Commercial Registry for ‘simple notes’ are contrary to European law

Jesus Alfaro
– Professor of Commercial Law at the Autonomous University of Madrid

For the rest of the data, the directive establishes that the fees charged “shall not exceed their administrative cost, including the cost of developing and maintaining the records.” The deadline to transpose the directive was July 31, although Spain has not yet passed the previous procedures. In the opinion of the professor of Commercial Law at the Autonomous University of Madrid, Jesús Alfaro, “the fees charged by the Spanish Registry for” simple notes “are contrary to European law, because 9 euros is much more than the cost of producing that information “.

Transparency organizations, in any case, advocate for the elimination of any type of fee and for suppressing the work of “gatekeepers” of commercial registrars in accessing public information.