2022 has been an active year for collective actions before the Competition Appeal Tribunal. There have been certification decisions, carriage disputes, appeals to the Court of Appeal and new claims in sectors as diverse as guitars and cryptocurrency exchanges.
We summarise the key developments below.
- Trucks: the Road Haulage Association was successful in the carriage dispute in the Trucks collective action, with the Tribunal preferring the RHA’s opt-in claim over UK Trucks Claim Limited’s opt-out application. The judgment contains important commentary on topics such as economic evidence, class definition and potential conflicts within the class. It also supports a potential emerging divergence in the Tribunal’s approach to business and consumer claims – in this business claim, the Tribunal preferred the RHA’s opt-in action whereas consumer claims have generally been given the go ahead on an opt-out basis. Permission to appeal has been granted to a number of the parties, so we have not heard the last on this topic in the context of Trucks.
- Apple App Store: following its decision to certify Dr Rachael Kent’s opt-out consumer claim against Apple at the CPO hearing in May 2022, the Tribunal issued its judgment on 29 June 2022 summarising its reasons and addressing Apple’s application to strike out Dr Kent’s unfair pricing abuse allegation (which failed). The certification question was dealt with shortly, partly as Apple did not contest it, but the Tribunal did survey the case law on unfair pricing abuses in some detail as part of its strike out analysis. Subsequently, the Tribunal awarded Dr Kent a significant proportion of her costs of the summary judgment/strike out applications. Trial is to commence from October 2024, with the Defendants’ application for a split trial having been refused.
- Google Play Store: Elizabeth Coll’s collective action against Alphabet and other Google companies was certified in late August, allowing the claim on behalf of 19.5m consumers to proceed. Google withdrew its opposition to a CPO and was not represented at the certification hearing, suggesting that respondents may be less willing to contest certification (at least, in some circumstances) following the Supreme Court’s judgment in Merricks. Nonetheless, the Tribunal held a certification hearing at which Ms Coll’s counsel made submissions and her expert was questioned by the panel on his reports. The Tribunal was satisfied that the claim met the criteria for a CPO.
- Boundary Fares: the Court of Appeal upheld the Tribunal’s decision to certify Justin Gutmann’s Boundary Fares claims against certain train companies. In another collective actions judgment from Lord Justice Green, the Court confirmed that liability (as well as damages) can be determined on an aggregate basis. Interestingly, the Court speculated about more creative distribution awards, suggesting the potential for a forward-looking approach, more akin to remedies ordered by a competition authority (as opposed to simple payments from defendants to class members). The Court also conducted a relatively detailed review of the law on abuse of dominance, showing the breadth of the category and exploring the intersection with consumer rights.
New (or newly public) collective actions
- Guitars: Elisabetta Sciallis filed an opt-out claim against Fender, following the CMA’s 2020 decision finding retail price maintenance in the musical instruments sector.
- Electricity: Clare Spottiswoode CBE filed a claim on behalf of energy consumers against several producers and suppliers of power cables following the European Commission’s 2014 power cables cartel decision.
- Interchange fees: two opt-in and two opt-out claims were filed on behalf of merchants against MasterCard and Visa in relation to interchange fees for certain payment cards. This adds to the plethora of interchange fee litigation before the UK courts, including Walter Merricks’ consumer collective action against MasterCard and the dozens of individual merchant claims.
- Apple batteries: Justin Gutmann’s fourth application for collective proceedings relates to Apple’s alleged concealment of battery issues and the slowing down of processors in its iPhones. The claim seeks at least £853m on behalf of 26.1m iPhone users in the UK.
- Cryptocurrency exchanges: Lord David Currie filed a €12bn opt-out claim on behalf of investors against cryptocurrency exchanges following an allegedly anticompetitive decision to delist Bitcoin Satoshi Vision. We wrote about the wider cryptocurrency litigation trend here.
- PlayStation: Alex Neill filed a £5bn opt-out claim on behalf of consumers against Sony PlayStation in which she alleges that the 30% commission charged on digital games and purchases made through the PlayStation Store amounts to an abuse of dominance.
The Tribunal issued two new practice directions relevant to collective actions.
- The Umbrella Proceedings Practice Direction gives the Tribunal the power to order that issues arising in one set of proceedings may be determined together with the same or similar issues, matters or features arising in other, unrelated proceedings. Rather than hearing the cases together or consolidating them, as the Tribunal often does where the subject matter of the claims themselves overlap, these “Ubiquitous Matters” may be dealt with together in the “umbrella proceedings” (not to be confused with “umbrella” claims or damages). The first Umbrella Proceedings Order was made in the Merchant Interchange Fee cases.
- The Conduct of Collective Proceedings After Certification Practice Direction notes that the Tribunal expects to have the same panel deciding the CPO application and trial, rather than a new panel taking over at the trial stage as the Tribunal’s Guide to Proceedings anticipated. If a collective settlement is proposed, a separate panel will therefore likely have to be constituted to consider that settlement.
The Tribunal issued a judgment on pass-on issues in the Interchange Fee proceedings, covering the Merricks collective action and the numerous individual merchant claims (as umbrella proceedings under the new practice direction). Facing a potential inconsistency between direct and indirect claimants, the Tribunal gave directions on how pass-on would be determined in the proceedings (without making any factual findings). The Tribunal considered that pass-on would be better approached using econometric evidence and existing studies of pass-on rates, rather than taking claimant-specific factual evidence from a sample of claimants.
What’s on the horizon
There’s no sign of a slowdown in activity any time soon, with the following awaited in the coming months:
- appeals against certification judgments in claims relating to Car Shipping, Foreign Exchange and Trucks, covering issues such as conflicts within the class, carriage and the certification standard;
- certification hearings in the collective claims relating to Facebook personal data, merchant interchange fees, consumer electricity, guitars, cryptocurrency exchanges and PlayStation games;
- the first environmental CPO application, following the announcement in November 2022 that Leigh Day had secured funding for Carolyn Roberts’ opt-out claim against UK water and sewerage companies; and
- potential updates to the Tribunal Guide, following a strong steer from the Court of Appeal that it could do with a refresh considering the experience of collective actions since the Guide was produced.
More generally, as the cases progress beyond the certification stage, it will become clearer how collective proceedings will be run through the usual evidence stages to trial. Areas to watch are the different paths opt-in and opt-out claims are likely to take, whether there is a divergence in how business claims are managed as compared to consumer claims and whether any of the current crop of claims take advantage of the opt-out settlement procedure.