Diagnosis and prognosis – tech competition class actions in the UK

I had the opportunity to speak earlier this week in Brussels at Informa's Competition Law in the Digital Era conference, in a panel focussed on how digital and big tech issues are currently being handled in the UK.  

For me, perhaps the most interesting recent development is the rush of cases to have landed before the Competition Appeal Tribunal which raise abuse of dominance issues as consumer class actions, without relying on a prior CMA or Commission infringement decision. 

In the ten minutes allotted to me I was able to make three main points, comprising a ‘diagnosis’ of the impact of the new cases on the competition law landscape in the UK, and a tentative prognosis of where we go from here.

• UK Competition authorities no longer have ‘exclusive rights’ to cutting edge tech issues. One might legitimately ask – did they ever? –  at Bristows we have seen our share of involvement in private enforcement against tech companies. But the CAT is now dealing with a raft of class actions, some of which overlap with ongoing CMA investigations (indeed, the CMA has been given permission to intervene in Kent v Apple, and no doubt will seek similar permission in other cases). And we don’t, in the UK, have a legislative equivalent of Article 16 of Reg. 1/2003 which prohibits courts of EU Member States from taking decisions that conflict with a decision “contemplated” by the Commission – rather, it’s down to judges to case manage cases taking a range of factors into account, among which a possible future CMA decision is just one. Defendants are therefore likely to need to continue fighting on multiple fronts, rather than dealing more sequentially with regulatory investigations followed by damages claims where those investigations are upheld. 
• A related point: the CAT is now on the front line for making decisions on some issues that are not currently being handled by regulators. One example is the Which v Qualcomm claim (actually an early mover among these cases), which raises issues somewhat akin to the, ultimately unsuccessful, US FTC action and those before the Korean FTC, but which hasn’t been focussed on in the UK/EU. While most of these claims are brought under abuse of dominance rules, another recent claim alleges a bitcoin cartel – again, not something that the CMA is known to be investigating.  
• The substance of the regime remains untested. Ok, so the UK courts have extensive experience of private actions (see above), and consumer class actions (which are essentially representative claims) are, at heart, not so very different. But there are distinct aspects, in terms of the aggregated approach, that will need to be taken to important issues like causation and loss. From a defence lawyer’s perspective, a key question here is whether this regime provides sufficient safeguards for defendants, particularly in a context where the abuse itself hasn’t been established by a regulator or stress-tested on appeal, and where some of the claims are raising pretty existential issues for the defendants’ business models (at least in so far as how they operate on the UK market). However, we shouldn’t overlook the – arguable – disconnect between the amount of funding that is evidently washing into the system and the very modest levels of competition damages that have been awarded in the past (think Britned…). Obviously there is a lot of optimism out there, but claimant lawyers still have much to prove on behalf of their representative clients and the consumers who sit behind them.

A fourth point that I might have explored had I had more time was the question of whether competition claims are now a viable alternative route for bringing data protection issues into play. Following the UKSC judgment in Lloyd v Google, claims for distress caused to individuals following data breaches are more difficult to bring on a representative basis. The Gormsen v Meta case before the CAT will no doubt be subjected to close scrutiny to see if using the competition rules, and in particular the opt-out consumer class action route, represents an indirect route to a similar goal. The CPO application hearing is listed for January 2023 – while recent CPOs have been granted, sometimes without being contested by defendants, the CAT has recently re-emphasised its “gatekeeping role”, so will no doubt scrutinise the claim very closely. For more on this topic, I recommend this recent article by my colleagues Matthew Hunt and Victoria Baron.