The SEC misread Section 13(q) to unambiguously require public disclosure of the annual reports. While some commentators on the rule had argued that the annual reports should be filed confidentially, and that the SEC should publicly release only a compilation of the disclosed information, the SEC declined to do so because it interpreted Section 13(q) as binding the SEC to require public disclosure of the full annual reports. The court explained that it would not give deference to this interpretation because deference is appropriate only when an agency has exercised its own judgment and not when it simply believes the interpretation is compelled by Congress. In interpreting the statute, the court found that the plain language was silent on whether the disclosure needed to be made publicly or just to the SEC. The court determined that if Congress had wanted to provide for public availability of the annual reports, it would have done so explicitly. The court noted the separate section of the statute (Section 13(q)(3)(A)) addresses public availability of the information but establishes a different and more limited requirement for what must be publicly available and what must be included in the annual reports (making compilations of the reported information publicly available but only to the extent practicable).

The SEC's decision to not grant an exemption for countries that prohibit payment disclosure was arbitrary and capricious. While some commentators had requested that the SEC waive disclosure requirements for countries that prohibit disclosure of payment information (Angola, Cameroon, China and Qatar), the SEC decided not to grant an exemption for these situations. Although the SEC acknowledged that this could cost affected issuers billions of dollars and create a competitive disadvantage for them, it determined that granting an exemption would be inconsistent with the structure and language of Section 13(q). Further, the SEC explained that an exemption could encourage countries to adopt laws prohibiting payment disclosure or interpret existing laws to prohibit disclosure. The court rejected the SEC's decision to not grant an exemption as arbitrary and capricious, stating that Congress endowed the SEC with authority to make exemptions from certain Exchange Act provisions, including Section 13(q). While the SEC has discretion in making an exemption, it may be required to do so if competition would otherwise be burdened. The court also stated that Section 13(q) uses the phrase "to the extent practicable" and therefore implies that flexibility exists in carrying out its requirements.