The number of competition claims brought as class actions in England ('group proceedings') has increased rapidly since the Supreme Court's judgment in Mastercard v Merricks, handed down in 2020.
In the last year alone, group proceedings have been raised against Facebook / Meta for £2.3 billion in damages to Facebook UK users; Apple for £750 million in damages to users of older iPhone models; and Amazon for £900 million in damages to UK consumers. Each has been raised in the Competition Appeal Tribunal (the "CAT") in London, as opposed to the English High Court.
It's clear that these actions are becoming more common in England, and businesses are under increasing financial and reputational risk. So what impact, if any, will the introduction of group proceedings in Scotland have on competition claims going forward?
What is anti-competitive behaviour?
Broadly speaking, conduct which actually or potentially prevents, restricts, or distorts competition within a market is likely to fall foul of competition law. UK competition law prohibits two main types of anti-competitive behaviour:
- anti-competitive agreements between businesses; and
- abuse of a dominant position by a business (there is no set threshold for when a business will be dominant but a rule of thumb is one with more than a 40% market share).
In practice, this type of behaviour can have a detrimental impact on a wide range of consumers and other businesses, for example by overcharging consumers or fixing prices so that other businesses cannot operate on a level playing field. Group proceedings allows those affected by similar issues (including those with low-value claims) to raise an action for damages against the organisation engaged in anti-competitive behaviour.
Position in England
Since its inception in 2003, the CAT has become the 'go-to' forum in England for competition damages claims, and the main forum for bringing such claims via group proceedings, rather than the English High Court.
The CAT is a specialist panel made up of a chairman (a lawyer or a judge) and two members (usually with expertise in a non-legal field such as economics or business). This has made the CAT a particularly attractive forum for progressing group competition claims, as claims are often complex and technical, requiring expert economic evidence. There has also been a trend for the High Court to transfer actions to the CAT to take advantage of its specific features.
The future in Scotland
One significant difference in Scotland's approach, as touched upon previously, is that group proceedings operate on an 'opt-in' basis in Scotland. Though the Court of Session may consider whether to introduce an opt-out framework later, the CAT currently allows for claims to be brought on either an 'opt-in' or an 'opt-out' basis, with the CAT retaining discretion over the issue. As opt-out proceedings involve greater complexity, cost and risk, the CAT expects the strengths of such claims to be more 'immediately perceptible in an opt-out than an opt-in case' according to its Guide to Proceedings, published in 2015. Nevertheless, it may be worthwhile for claimants with a strong claim to consider raising their action at the CAT to retain the possibility that it may proceed on an opt-out basis.
Going forward, it is possible Scotland will mirror England's approach. The Commercial Court in the Court of Session is designed to deal with commercial disputes in a speedy and efficient manner, with four specialist commercial judges with a wide range of expertise in commercial disputes. To some extent, there is also an overlap of expertise as three Court of Session judges sit on the CAT as chairmen. Whether the CAT or the Commercial Court is most appropriate for a claim may well depend on the facts and circumstances of the case. Nevertheless, it will be interesting to see whether Court of Session judges choose to transfer any future group proceedings to the CAT or progress matters in the Commercial Court.