On 19 December 2024, the Competition Appeal Tribunal (Tribunal) dismissed Justin Le Patourel’s opt-out collective claim against BT for abusing its dominant position in the market for voice only telephony services.¹

After an eight-week trial which ended in March 2024, and just under four years after the claim was filed, the Tribunal found that BT’s prices had not been unfair and there was no abuse of its dominant position. The outcome has significance, not only for the parties in this case, but for the future development of the regime as a whole. 

Background

Mr Le Patourel applied for a collective proceedings order in January 2021 on behalf of over 2 million customers who bought certain landline services from BT. The claim was technically stand-alone (i.e. it did not “follow on” from a formal finding of infringement by an enforcement authority), but drew on a 2017 Ofcom review into the market for landline telephone services in which Ofcom accepted commitments from BT to reduce its prices. Mr Le Patourel alleged that BT had breached the Chapter II prohibition of the Competition Act 1998 by charging unfair prices. He sought aggregate damages of £1.1bn for the class (before interest). 

The claim was certified in October 2021. The Court of Appeal dismissed an appeal of the certification decision by BT in May 2022 and the proceedings against BT then moved relatively quickly to trial, partly given the Tribunal’s sensitivity to the elderly and vulnerable persons within the class.

The decision - no abuse of dominance

The Tribunal found that BT was dominant in the market for standalone fixed voice services (SFV Services). However, following a detailed review of the case law on pricing abuses and the extensive expert evidence filed by the parties, the Tribunal concluded that BT’s prices were excessive but not unfair. Indeed, the Tribunal emphasised the importance of this distinction, issuing a reminder that an excessive price is not automatically unfair. While Mr Le Patourel sought to rely on Ofcom’s 2017 review for support, the Tribunal did not give material weight to it, preferring its own analysis based on more data and substantial expert evidence. 

When considering excessiveness, the Tribunal found that a “reasonable margin” for BT’s SFV Services was 13.5% and that 40% of BT’s common costs (of providing all consumer services, including television, broadband and other consumer services) should be recoverable from those services. Using these metrics, combined with the relevant incremental costs, the Tribunal identified the “competitive benchmark” and concluded that BT exceeded that benchmark by between 25% and 49.9% in the relevant years, which the Tribunal deemed to be significant and excessive. 

In considering unfairness, the Tribunal assessed numerous factual matters including the value BT provided to its SFV customers, customer loyalty and switching, and pricing in adjacent markets. While the Tribunal did not accept all of BT’s arguments, it ultimately concluded that BT’s prices were not unfair. Accordingly, there was no abuse and the claim failed. 

Commentary 

As we reach the end of 2024 and reflect upon a bumper year of developments for collective proceedings, the BT judgment illustrates the risks inherent in bringing substantial standalone class claims. While one key takeaway from Tribunal judgments in recent years has been the relatively low threshold for obtaining certification, this decision serves as a reminder that certification is only the first step and that claims will be robustly tested at trial.

The failure of this claim before the Tribunal will no doubt give class representatives and funders pause for thought, particularly as Mr Le Patourel’s claim was more orthodox than some others currently before the Tribunal. However, it is important to recognise that the class representative was successful in his arguments on a number of issues in the claim, even if the case on liability was ultimately dismissed.

Those awaiting this judgment for learnings on how the Tribunal might approach aggregate damages and distribution may be disappointed, but several collective trials listed for 2025 promise further developments before too long.²

¹ [2024] CAT 76
² Trials are listed to start in January 2025 in McLaren’s Car Shipping claim and Kent’s App Store claim.