Pro-Sys and the clear blueprint to trial in UK collective proceedings: Gormsen v Meta

We’re only at the beginning of spring 2023 and already the Competition Appeal Tribunal (“CAT”) has issued a sizeable number of decisions on the UK’s collective proceedings regime. So far, the most commented-on surely was the Tribunal’s refusal of 20 February 2023 to grant Dr Liza Lovdahl Gormsen’s Application as Proposed Class Representative to commence “standalone” opt-out collective proceedings against Meta Platforms, Inc. and other corporate members of the Meta group (“Meta”).[1] Simply put, the Tribunal wasn’t at all convinced by the methodology for assessing quantum employed by Dr Gormsen (the “Proposed Class Representative” – “PCR”).

The PCR claims that the way user data of Facebook users is monetised by Meta constitutes an abuse of a dominant position in a market by Meta contrary to the Chapter II prohibition in section 18 of the Competition Act 1998. The class size would be 45 million persons, essentially encompassing every person using Facebook in the UK between 2016 and 2019.

However, the CAT brought this ambitious endeavour to an abrupt halt by means of the “Pro-Sys test”, a test which was originally developed by the Canadian Supreme Court: In its eponymous decision[2], the Court stated that “the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class-wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class […].”

Transplanted into the UK collective proceedings regime, the test ensures that prior to the certification of a claim, the parties – most notably, the PCR – have established a clear blueprint to trial, especially with regard to their methodology. In light of the complex nature of collective actions, the Pro-Sys test is an important component of the CAT’s toolbox in exercising its gatekeeper and case management functions.[3] The Tribunal stressed that the purpose of the test is not to “kill off” claims at the earliest stage possible; but rather to safeguard against unmanageable cases coming to trial, wasting everybody’s time and resources.

The Tribunal then moved on to apply the Pro-Sys test to the PCR’s methodology, with devastating consequences: Out of the three types of abuses of a dominant position the PCR had alleged, the CAT only really addressed the “Unfair Price abuse”[4], briefly stating with respect to the other two that “the Pro-Sys test has not even been addressed – let alone any kind of “blueprint” to trial provided”. Regarding the “Unfair Price abuse”, the CAT was very clear in its verdict that the methodology developed by the PCR’s expert both failed to do justice to the complexities and difficulties of an unfair prices case and was in itself riddled with inconsistencies, false assumptions etc.

In the end, what prevented the CAT from “putting the application out of its misery”, as Meta demanded, was the importance of access to justice as articulated by the UK Supreme Court in Merricks[5]. Instead, the PCR’s application was stayed for a period of six months, starting from 22 March 2023, in order to give the PCR a second chance.

Regardless of whether the PCR will be able to turn the tide, this judgment serves as a warning for future collective proceedings: a sound methodology and a “blueprint to trial” can’t just be developed “on the go” once the certification stage is passed, as the CAT is taking its gatekeeper position increasingly seriously.

Johannes Nickl[6]

[1] Gormsen v Meta Platforms, Inc. and Others [2023] CAT 10.

[2] Pro-Sys Consultants v. Microsoft [2013] SCC 57.

[3] See in this regard MOL (Europe Africa) Ltd v. Mark McLaren Class Representative Ltd (“McLaren”), [2022] EWCA Civ 1701, were the CAT’s failure to apply the Pro-Sys test prior to certification was regarded as an error of law by the Court of Appeal.

[4] The PCR basically alleges that the “price” users have to pay for access to Facebook, i.e. their personal data, is “unfairly high” in light of the services offered in return.

[5] Mastercard Incorporated and others v Walter Hugh Merricks CBE [2020] UKSC 51.

[6] Doctoral Candidate at Heidelberg University, Germany.

Foto Credits: pxfuel

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