On 8 March 2022, the Competition Appeal Tribunal published its summary of the opt-out collective claim filed by Dr Liza Lovdahl Gormsen against Meta, in relation to alleged abuses of dominance imposed through Facebook’s terms and conditions.[1] As the 17th application for a collective proceedings order made since the class actions regime changed in 2015, it seemed an opportune time to reflect on a few trends in collective claims. More often than not, those claims have been very large, consumer-focussed opt-out claims, increasingly based on a stand-alone abuse of a dominant position. 

There are a few notable features of Dr Lovdahl Gormsen’s claim itself, which illustrate broader learnings about the competition collective actions regime in the UK:

  • The class is enormous: the claim is brought on behalf of some 45 million class members. In terms of class size, this is similar to the Merricks claim for interchange fees, where a significant majority of the UK population was included.[2] While Dr Lovdahl Gormsen’s claim is likely to be considerably more modest in damages terms (although we do not yet know the sum being claimed), this illustrates the trend towards massive claims. Size presumably plays a significant role in making these claims viable, from an economic perspective, but query whether we are seeing a prioritisation of scale over quality.
  • Collective proceedings are a consumer-focussed mechanism: Dr Lovdahl Gormsen’s claim plainly falls into the consumer category of collective claims, following claims brought by Mr Merricks (interchange fees), the Consumers’ Association (Qualcomm chips), Dr Kent (Apple app store), Ms Coll (Google play store), Home Insurance Consumer Action Limited (CompareTheMarket.com), Mr Gutmann (trains boundary fares) and Mr Le Patourel (BT landlines). The collective mechanism was always intended for large claims with a low individual value, making them well suited for mass consumer harm cases. While there have been business class claims (trucks, foreign exchange, car shipping), consumer claims are the larger category. What is surprising is the ambitious nature of the claims – they go far beyond what we have seen before the English courts previously, at least as far as competition law is concerned.
  • Stand-alone abuse of dominance claims: Dr Lovdahl Gormsen’s claim follows a number of stand-alone claims for abuse of a dominant position, with no convenient competition authority decision to neatly set out the infringement. The classic follow-on cases have not gone away (trucks, foreign exchange, car shipping), but the level of confidence in the market – in terms of funding and entrepreneurial claimant firms – means the lack of authority enforcement has not deterred claimants from taking on major companies in novel claims.
  • Opt-in or out: Dr Lovdahl Gormsen’s claim is brought on an opt-out basis, confirming that opt-in is of limited appeal. Indeed, all claims filed to date, save for the Road Haulage Association’s trucks claim, have been brought on this basis. What is interesting about the claim against Meta is that it gave no option for non-UK domiciled class members to opt-in, citing the administrative difficulties that would cause.
  • Individuals and SPVs: there is a mix of approaches to whether the class representative will apply as an individual or set up a special purpose vehicle for that purpose (as well as for pre-existing organisations such as Which? and the Road Haulage Association to seek certification as class representative). This looks like something we can expect to continue to see going forward as the Tribunal has expressed no real preference as between the models.

The confidence in the UK’s competition class action regime generated by the Supreme Court’s decision in Merricks[3] can be seen in this latest CPO application. Previously, this is the sort of alleged infringement that could only realistically have been considered by a competition authority. Now the courts are being called on to answer these complex questions.  The run of certification decisions of the past six months confirms that obtaining a CPO is not the real test, but getting to and through trial may be. Managing class litigation of this scale and societal impact will be a significant challenge and it remains to be seen how it will be done.


[1]     Case 1433/7/7/22 – Dr Liza Lovdahl Gormsen v Meta Platforms, Inc. and Others. See: https://www.catribunal.org.uk/sites/default/files/2022-03/20220308_1433_Gormsen_v_Meta_Summary.pdf

[2]     Case 1266/7/7/16 – Walter Hugh Merricks CBE v Mastercard Incorporated and Others

[3]     Mastercard Incorporated and others (Appellants) v Walter Hugh Merricks CBE (Respondent) [2020] UKSI 51

Author

Jennifer is a Senior Associate in the Baker McKenzie Dispute Resolution team based in London. She is also a member of the firm's EU, Competition & Trade team. Jennifer advises clients in relation to general commercial disputes, competition claims, competition appeals and judicial review challenges. She is a member of the firm's Competition Litigation, Public Law and Business Crime Units.