Collective action against Meta is refused certification but given opportunity to amend

 

Collective action against Meta is refused certification but given opportunity to amend

The Competition Appeal Tribunal (CAT) has given judgment on an application for a collective proceedings order (CPO) under section 47B of the Competition Act 1998, against Meta Platforms, Inc, Meta Platforms Ireland Limited and Facebook UK Limited (Meta).

The proposed collective proceedings would combine opt-out stand-alone claims for damages caused to a class of UK users of Facebook between February 2016 and December 2019.

Meta is alleged to have abused its dominant position contrary to Chapter II of the UK Competition Act 1998.  The allegedly abusive conduct comprises the imposition of terms and conditions imposed on Facebook users that require them to disclose personal data that is unnecessary and disproportionate.  It is further alleged that Meta has charged an unfair high price by requiring the disclosure of valuable personal data for the provision of social networking services.

The CAT found that the expert methodology relied on by the proposed class representative for establishing loss on a class-wide basis was inadequate and it was unable to grant a CPO.  However, the CAT has ordered that the application be stayed for six months so that the proposed class representative can reassess the methodology and file new evidence.

Dr Liza Lovdahl Gormsen v Meta Platforms, Inc and others [2023] CAT 10

Damages awarded in first UK trucks cartel competition damages action

 

Damages awarded in first UK trucks cartel competition damages action

The Competition Appeal Tribunal (CAT) has awarded follow-on damages in actions brought by Royal Mail and BT against DAF Trucks.

The CAT has ordered DAF to pay approximately £17.5 million in damages to Royal Mail and BT.  The case is a landmark judgment representing the UK’s first successful follow-on damages claim against a participant in the EU trucks cartel.

The claims are based on the July 2016 settlement decision of the European Commission finding that certain EEA manufacturers of trucks were engaged in a cartel in breach of Article 101 of the TFEU over a 14-year period (broadly, 1997-2011). 

The Commission found anti-competitive conduct which consisted of coordination amongst the participating undertakings in respect of the EEA gross list prices for medium and heavy trucks.

The claimants claimed damages in the form of the increased prices and lease payments that they paid for those trucks which were higher than they would have been without the infringement (the ‘overcharge’).

The CAT found that DAF is liable to be assessed for an overcharge at 5% for both claimants on their value of commerce over the whole of the relevant period.

The CAT rejected certain of DAF’s defences including as to resale pass-on.

The CAT has invited the parties to calculate the damages including interest and tax based on its findings.

The value of the overcharge found by the CAT is quite high given that the value of relevant trucks can range from £60,000 to £300,000 over the period.

The ruling is likely to embolden other trucks cartel claimants whose claims remain to be heard and fuel the growing momentum of competition damages claims in the UK.

 

Royal Mail Group Limited v DAF Trucks Limited and others and BT Group PLC and others v DAF Trucks Limited and others [2023] CAT 6

European Commission consults on draft regulation on foreign subsidies

 

European Commission consults on draft regulation on foreign subsidies

The European Commission has launched a consultation on a draft implementing regulation for the conduct of proceedings under Regulation 2022/2560 on foreign subsidies distorting the internal market (the Foreign Subsidies Regulation).

The Foreign Subsidies Regulation gives the Commission new powers to investigate and impose redress arising from financial contributions granted by third (non-EU) countries to companies engaged in economic activity in the EU. 

It imposes an obligation for companies to notify the Commission of certain concentrations and involvement in public procurement procedures which have foreign financial contribution elements.

The new rules will require merging companies to notify their mergers from 12 October, 2023 provided one of the parties has a turnover of at least EUR500 million and the transaction involves a foreign financial contribution of at least EUR50 million.

Companies will also be obliged to notify their participation in public procurement tenders in cases where the estimated contract value exceeds EUR250 million and the bid involves a foreign financial contribution of at least EUR4 million.

The draft regulations set out the procedural requirements of the new regime. It is hoped that guidance on how the Commission will approach issues of substance will be available soon. The approach in the proposed notification form appears to shift the burden to companies to establish the absence of a subsidy or its distortive effects.

The Regulation will be effective from 12 July 2023 when the Commission will be able to start its own investigations.

The notification obligation for companies will be effective as of 12 October 2023.

The Commission invites responses to the consultation by 6 March 2023.

 

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_591