Competition collective actions: 2023 round-up and look forward to 2024

Collective actions in the Competition Appeal Tribunal made headlines in 2023, with the first settlement, numerous appeals and more certification decisions. 2024 has already seen the first collective trial begin, with further certification and remittal hearings later in the year.

We summarise the key developments below.

Certification decisions

2023 saw some mixed outcomes for Proposed Class Representatives (PCRs) seeking to bring collective proceedings. Some claims involving alleged infringements by rail, tech and gaming firms cleared the certification hurdle. Other applications faced rejection, although the Tribunal has given the PCRs a chance to try again.

Gutmann v Govia Thameslink: A second application against a rail operator for an opt-out collective proceedings order (CPO) was certified in March 2023. The claim relates to boundary fare rail tickets and is similar to another claim against operators of the South Eastern and South Western rail franchises. The defendants did not contest certification and a split trial has been ordered, with the alleged abuse of dominance trial listed for June 2024.
Lovdahl Gormsen v Meta: The PCR’s application for an opt-out CPO was stayed in a claim seeking damages of approximately £2.3bn plus interest from Meta for alleged abuses of dominance by imposing unfair terms on Facebook users. The Tribunal ruled that the PCR’s proposed methodology failed to meet the required standard and did not provide a “blueprint to trial”. The PCR’s revised CPO application was heard in January 2024.
CICC v Mastercard and Visa: CICC’s applications for various opt-in and opt-out CPOs against card scheme operators were declined and the proceedings stayed to allow the PCR to address various defects including an inadequate class definition, inadequate damages methodology and funding issues. A hearing of the revised CPO applications is to be held in spring 2024.
Gutmann v Apple: An opt-out CPO was granted in relation to alleged iPhone battery “throttling”, which the PCR claims was an abuse of dominance. The Tribunal initially questioned the factual basis for the abuse claim and adjourned the original certification hearing. Following limited disclosure, the application was subsequently granted and Apple’s strike-out application dismissed.
Neill v Sony: An opt-out CPO was granted to Alex Neill, who alleges that the 30% commission charged on digital games and purchases made through the Sony PlayStation Store amounts to an abuse of dominance.

New collective actions

The following applications for opt-out CPOs were issued, continuing the trend for stand-alone claims for abuse of dominance against tech firms and adding the first environmental claims to the Tribunal’s packed case list.

Charles Arthur issued an application against Alphabet/Google seeking damages of up to £3.4bn in the online display advertising market. In October 2023, the Tribunal approved the consolidation of Mr Arthur’s application with a similar application filed by Claudio Pollack, thereby avoiding a carriage dispute. The claim is now being pursued as a single application though a special purpose vehicle (Ad Tech Collective Action LLP).
Dr Sean Ennis issued an application against Apple seeking damages of up to £785m on behalf of app developers for Apple’s alleged overcharging of app prices and in-app purchases via its App Store.
Nikki Stopford issued an application against Google for allegedly abusing its dominance in the online search market and certain adjacent markets concerning mobile device functionality. The claim is partly based on a European Commission decision and the preliminary damages estimate stands at £7.3bn.
Robert Hammond issued an application against Apple and Amazon seeking damages for an alleged abuse of dominance in relation to Amazon’s conduct in the market for intermediation services on online marketplaces.
Christine Riefa Class Representative Limited issued an application against Apple and Amazon for allegedly entering into unlawful agreements that restricted competition and inflated prices for Apple products sold online in the UK. The PCR proposes to represent over 36 million class members.
Professor Carolyn Roberts issued an application against each of Anglian Water, Northumbrian Water, Yorkshire Water, United Utilities Water and Severn Trent Water. The professor of environmental science alleges that the water companies abused their dominance in the sewerage market, leading to higher prices.
Justin Gutmann (a PCR who has already brought a number of collective actions) issued a further application against each of BT/EE, Telefonica, Vodafone and Hutchinson 3G, alleging that the telecoms companies engaged in abusive conduct by overcharging customers for mobile telephony services (so-called “Loyalty Penalties”).

Other developments

The Supreme Court issued its judgment in PACCAR which determined that litigation funding agreements where the return for the funder is based on a percentage of the damages pot constitute damages-based agreements (DBAs), and are therefore unenforceable insofar as they relate to opt-out collective proceedings. Since this decision, the Tribunal has heard challenges to PCRs’ funding arrangements in claims against Sony, Visa and Apple. In each case, the Tribunal was satisfied that the funding arrangements were enforceable, but it gave the parties permission to appeal in Sony and Apple given the broader public interest in clarifying the validity of litigation funding arrangements post-PACCAR.

The Court of Appeal has ruled that there is no general prohibition on defendants in the RoRo collective action contacting class members directly about the proceedings, reversing the Tribunal's earlier decision that this was forbidden by its rules. The Tribunal had objected to defendants' letters to some corporate class members warning them of possible disclosure requests. The Court of Appeal found no general or specific reason to ban such communications.

In the first hearing of a pure carriage issue (independent of certification), the Tribunal awarded carriage of the proposed claim against Amazon in relation to its “Buy Box” (and related features) to Mr Hammond, over Ms Hunter’s competing application. In particular, the Tribunal preferred the methodology of Mr Hammond’s expert, Dr Pike of Fideres Partners. The Tribunal has stayed Ms Hunter’s CPO application, which the Tribunal described as “well put together”, in case Mr Hammond’s application should “stumble”.

The Court of Appeal confirmed in McLaren that the statutory requirement for a decision to be “as to the award of damages” to be capable of being appealed should be interpreted broadly, so as to include decisions on any issue that is capable of having “some causal effect” on the award of damages and could ultimately affect quantum. It can now be expected that interlocutory case management decisions will meet the requirement and be appealable in the vast majority of cases (the exception being PACCAR-type challenges on issues where the link to quantum is too remote or non-existent).

What’s on the horizon for 2024

2024 looks set to be another year full of interesting developments in the collective actions space.

The first ever collective action trial, in the claim brought by Justin Le Patourel against BT Group, began on 29 January and is listed for eight weeks. If damages are awarded, interesting issues may also arise on distribution, given the suggestion in an earlier judgment in this case that account credits or other alternatives to usual monetary payments of damages could be considered.
We await the Tribunal’s judgment in the Merricks interchange fee collective action on value of commerce and causation issues, in which the class representative contends that MasterCard’s Europe-wide interchange fees caused loss to a class of UK consumers. Pass-on issues will be heard alongside the Merchant Interchange Fee Umbrella Proceedings in a trial listed to commence on 11 November 2024.
The Tribunal is due to decide whether Dr Lovdahl Gormsen’s revised CPO application against Meta should be granted including, in particular, whether it addresses the Tribunal’s concerns about the lack of “blueprint” to trial in the PCR’s first CPO application. The Trucks and FX collective actions (the first to involve competing PCRs) each await remittal hearings before the Tribunal following Court of Appeal judgments last year.

If you would like to discuss the article further, please get in touch with any of the authors or our competition partners Cameron Firth and Emma Radcliffe.