Antitrust class actions in the UK are beginning to take hold before the specialist Competition Appeal Tribunal (the “CAT”). The two filed to date show the possibilities at different ends of the value scale and the wide range of fact patterns that can be relevant.
The first claim, filed on May 25, 2016 under the new rules introduced on October 1, 2015 (see case page here), is relatively small, with an alleged claim value of GBP 7.7 million, including interest. As noted in our prior coverage, it was expected that the first claim under the UK’s new procedures would be based on a cartel case (or at least another type of horizontal antitrust law infringement between competitors), but that was not the case. The claim is instead based on a type of resale price maintenance (“RPM”)—specifically, a finding by the UK antitrust regulator that a supplier of mobility scooters had illegally banned retailers in the UK from advertising online prices below its recommended retail price.
The claim, on an opt-out instead of opt-in basis (which requires court approval), was brought by the UK National Pensioners Convention (“NPC”) on behalf of people who allegedly paid too much for mobility scooters from Pride as a result of this RPM. The NPC claims that up to 34,000 Pride customers who bought scooters between 2010 and 2012 may each be entitled to around a GBP 200 refund, or more in specific cases.
Since these types of claims are very new in the UK (and this is the first) the parties will be tackling for the first time in the UK many class action issues. These will be familiar to U.S. readers, but perhaps not to those elsewhere. As things stand, the CAT has asked any person with an interest (including any member of the proposed class) to provide, by November 11, 2016, any objections to its collective proceedings order (“CPO”). The CPO is the order that would permit the proposed class representative to act as such and to bring the opt-out collective proceedings.
The latest, and second such, claim (see case page here) was filed before the CAT on September 8, 2016. This recent claim is much bigger and, hence, received significantly more press coverage in the UK and elsewhere. Indeed, with an alleged claim value of GBP 14 billion including interest, this is, according to the law firm acting for the claimants, “the biggest [claim] in UK legal history.” That may or may not be the case, but quite clearly the alleged claim is huge, and puts the new UK rules right under the spotlight.
This claim is also a follow-on case, but based on a finding by the EU-wide antitrust regulator, the European Commission (“EC”). The EC found that, from May 22, 1992 until December 19, 2007, the MasterCard payment organisation had infringed EU antitrust law by in effect setting a minimum price which merchants had to pay to their acquiring bank for accepting payment cards in the European Economic Area (“EEA,” consisting of the EU plus Norway, Iceland and Liechtenstein). This was implemented by means of Intra-EEA fallback interchange fees for MasterCard-branded consumer credit and charge cards and for MasterCard- or Maestro-branded debit cards. The EC’s finding was based on a horizontal antitrust infringement theory, as opposed to the vertical infringement found in the mobility scooters case.
The proposed class comprises individuals who between May 22, 1992 and June 21, 2008 purchased goods and/or services from businesses selling in the UK that accepted MasterCard cards (i.e., they do not need to have used a MasterCard) at a time at which those individuals were both: (1) resident in the UK for a continuous period of at least three months and (2) aged 16 years or over. Unsurprisingly, the class is likely to be extremely large (estimated at 46,200,000 individuals). The claimants (the class representatives) are also applying for this case to go forward on an opt-out basis.
These two cases are very different, but show the wide range of possibilities before the CAT for the new class action antitrust law in the UK. One case is relatively small in value terms (particularly for a class case) while the other is claimed to be the largest-ever UK claim of any type. One case relates to a vertical infringement of antitrust law (a type of RPM), while the other relates to a horizontal infringement (but still not a classic “smoke-filled-room” cartel). One concerns a relatively small group of customers, while the other concerns a large portion of the entire UK population.
Both cases, however, are opt-out cases (or the class representatives are at least seeking to go down that route). Assuming they do continue down that route, the CAT will tightly manage the process so as to make sure that the various protections in the legislation against the perceived problems with class claims are implemented.
It will take some time to get to the substance of these cases (if they ever do get there), but at least in the MasterCard case, a key issue is going to be whether pass-on by the retailers to the cardholders actually took place. The claimants (the class representatives) will need to show that interchange fees were passed on to consumers by retailers. In this context, both sides will scrutinise very closely a recent judgment of the CAT also concerning MasterCard (see case page here). That case involved a claim brought by a UK supermarket (Sainsbury’s) against MasterCard, where the CAT ruled that pass-on had not taken place:
It follows that MasterCard’s pass-on defence must fail. No identifiable increase in retail price has been established, still less one that is causally connected with the UK MIF. Nor can MasterCard identify any purchaser or class of purchasers of Sainsbury’s to whom the overcharge has been passed who would be in a position to claim damages.
There will no doubt be a huge battle on that issue if it ever comes to it, but (as with the mobility scooters case), many preliminary steps need to be dealt with before the real substance will come to the fore. Trial dates for both cases are not expected before late 2017 at the earliest. In the meantime, we await the next class action claim in the UK CAT, and wonder whether it, unlike its predecessors, will be based on a true cartel theory.