Public-private partnerships are, as the saying goes, kind of a big deal. By “public-private partnerships,” I mean arrangements where private, usually corporate, actors work with the government to accomplish a common public good. They take two main forms: contracting, where private firms carry out government tasks, and regulation, where the government relies on private disclosures and compliance systems to pursue public interests like safety or fairness.
Despite making up a significant portion of both the GDP and federal spending, public-private partnerships are often frustratingly opaque. This opacity is, in part, by design: transparency policies governing these partnerships routinely subordinate public accountability to corporate claims of confidentiality, rooted in concerns over profit. This post examines one significant barrier to public-private transparency—FOIA Exemption 4—and offers some possible approaches to mitigate those barriers.
The State of Public-Private Partnerships
In FY2024, the federal government spent $755 billion–over 10% of the total budget–on private contracts. Meanwhile, compliance with regulation costs private businesses an estimated $300-700 billion annually. Together, these figures underscore how enmeshed private enterprise and public governance have become.
The politics of these partnerships are increasingly paradoxical. Agencies like the Department of Government Efficiency (DOGE) have made headlines by promising to slash government spending and loudly publicized canceled contracts. However, at the same time, the federal government has entered into new contracts with controversial surveillance providers like Palantir and Paragon. On the regulatory side, the administration has sought to loosen restrictions on the financial and technology sectors while demanding more direct control over a variety of other industries, from higher education to law firms. What has emerged is not a smaller government, but a more privatized and less accountable one.
Public-Private Transparency: Gone (b)(4) You Know It
Given that these partnerships spend public funds and shape public outcomes, we might expect them to be relatively open to inspection. But sources like the System for Award Management and USASpending.gov provide only high-level information about government contracts. Of course, both public and private entities often prefer to withhold information, especially if that information would reveal incompetence or malfeasance. Left to their own devices, such entities may well operate in secret or, arguably worse, provide only partial transparency. An example of the latter is DOGE’s infamous “Wall of Receipts,” which bragged about—and generally exaggerated—savings from cut contracts but concealed information about new or renewed contracts. Likewise, regulatory bodies often publicize enforcement victories while ignoring bad behavior that goes unaddressed, producing a selective and distorted picture of the regulated industry.
The result is that accurate information about public-private interactions can be difficult to find. However, this lack of transparency is not for lack of interest. According to a 2024 survey by the Partnership for Public Service, only 15% of Americans think the government is sufficiently transparent. And transparency, when achieved, has been shown to improve trust in the government: a 2021 study in Argentina found that disclosing positive results improved public trust more than disclosing negative results diminished it. So why, then, is information about public-private partnerships—an increasingly important aspect of government function—so hard to come by?
One essential element of government transparency is the federal Freedom of Information Act, or FOIA. FOIA allows the public to request information held by federal executive agencies—with certain exceptions. One of these exceptions is 5 U.S.C. § 552(b)(4), or Exemption 4, which allows agencies to withhold “trade secrets and commercial or financial information obtained from a person that is privileged or confidential.” Unlike most FOIA exemptions, which seek to balance transparency with other public interests like safe and effective government operation, Exemption 4 protects purely private interests. Indeed, Exemption 4 is the only exemption that allows private actors—not just government officials—to object to disclosure, giving corporations a direct hand in state secrecy.
Traditionally, this expansive exemption was subject to limiting factors. In 1974, the D.C. Circuit held that “confidential” meant that disclosure was objectively likely to cause tangible harm, either by chilling the disclosure of information by regulated entities or by imposing a substantial competitive disadvantage to the disclosing party. The court’s reasoning was straightforward: without an objective standard, private parties could make endless subjective claims of confidentiality. While not all judges agreed with this reasoning, it was largely considered the standard for Exemption 4 withholdings for 25 years.
That changed in 2019, when the Supreme Court issued its ruling in Food Marketing Institute v. Argus Leader Media. Argus Leader, a South Dakota newspaper, sought store-level information about SNAP benefits from the USDA. The Food Marketing Institute, a private industry group, intervened and litigated the case up to the Supreme Court. There, the Court held that the benefits information was exempt, not because it could cause some competitive harm, but because the government had “long promised” participating stores that it would keep SNAP data private. In other words, as long as the public actor (the USDA) and the private actor (the store) agreed the information would be kept confidential, it could be withheld from the public under Exemption 4. (The Court left open whether Exemption 4 could be raised without an express assurance of confidentiality, a question lower courts are still sorting through).
In short, confidentiality under Exemption 4 has shifted from an objective standard to a subjective pact. Under this standard, public and private partners can effectively opt out of transparency with a simple confidentiality agreement. The objective reasonableness—or unreasonableness—of that agreement no longer has any weight. The fact-intensive nature of this standard also means requesters may have little recourse to challenge Exemption 4 denials and litigate the issue to discovery. The result is a legal regime that prioritizes private interests at the cost of extensive withholding of public information—and it comes at a time when public-private partnerships are expanding in scale and sensitivity.
A More Transparent Future?
Argus Leader upended the rules of transparency for public-private partnerships, but that doesn’t mean all hope is lost. There is a strong tradition of construing FOIA exemptions in favor of disclosure, and there are constructions of Exemption 4 that would salvage at least some degree of transparency. Moreover, FOIA is only one of several overlapping transparency regimes that might shed light on public-private partnerships.
In terms of legal solutions, one option is for requesters to pivot from “confidentiality” to the statute’s other prong: “trade secrets and commercial or financial information.” While Argus Leader allows public and private partners to establish confidentiality through mutual agreement, and possibly even implicit understanding, courts still have the power to determine whether the information at issue is objectively commercial in nature. This interpretation has found some favor with the Ninth Circuit, which recently held that employee demographic surveys were not inherently commercial, carving out space for a more restrictive reading of Exemption 4.
Requiring both confidentiality and commerciality to trigger Exemption 4 would be more consistent with the purpose of FOIA. This purpose was reinforced by the 2016 amendments, which added a “foreseeable harm” requirement. Under this standard, it is not enough that records meet the literal description of an exemption; the agency must also find that disclosure would foreseeably harm an interest protected by that exemption. The Argus Leader court did not address this provision because the originating FOIA request was filed prior to 2016. However, there is a plausible argument that the foreseeable harm standard effectively reintroduces the pre-Argus standard: information is only exempt if disclosure would be reasonably likely to harm a protected interest such as public-private cooperation or industry competition.
Agencies themselves also hold the power to support government transparency. They could simply decline to enter into confidentiality agreements or explicitly disclaim implied guarantees of nondisclosure. And, while FOIA is a powerful piece of legislation, it is far from the only transparency law. Other federal laws, agency regulations, and state statutes often mandate publication of the very data the public most wants—such as pricing data, safety audits, or performance outcomes. A clever requester might argue that no private actor could reasonably believe that information provided under a reporting statute was held in confidence.
Finally, the public can demand disclosure directly from companies. Shareholder actions aside, sustained public pressure has occasionally led to disclosure—sometimes even over the government’s objections. For example, public concern over privacy has led many internet platform providers to report information about the number of warrants and criminal subpoenas received and responded to each year. This practice did not stem from regulation but reputational accountability.
The last few months have shown us—if it were ever in doubt—that transparency about public-private partnerships is a condition of democracy itself. Selective disclosure of contracting information has been a key element in allegations of “fraud, waste, and abuse,” providing cover for a broader project of administrative dismantling. This, in turn, is pushing the deregulation of many industries, including the financial, energy, and technology sectors. Meanwhile, government funding for research, education, and healthcare is being cut, often based on unclear or unfounded claims.
If the public is meant to make informed choices about how collective resources are spent and regulated, it must have access to accurate and complete information about public-private interaction. The current Exemption 4 regime places that interest well below the corporate right to secrecy. Legal challenges to that regime are already underway, but it will take a coordinated effort to reach a healthy balance of competitive privacy and public accountability once again.
