Is it 'game over' for the gaming industry – The significance of 'opt-out' v 'opt in' in Group Proceedings

The UK Competition Appeal Tribunal has been busy over the past few months with significant 'opt-out' class actions (or collective proceedings as known under the Collective Proceedings Order Regime) being raised by individuals against Sony, PlayStation and Google.

Sony, PlayStation are alleged to have been unlawfully overcharging PlayStation gamers by adding an additional 30% commission on the sale of digital games via the 'PlayStation Store'. Individuals seek to recover a total of £9bn in damages on behalf of 5 million individuals. Similarly, Google is alleged to have breached competition law by excluding competition and/or charging an unlawfully high level of commission on digital purchases (including purchases of and within apps) via the Play Store, causing around 19.5 million users of the UK Play Store to be overcharged.

The claims against Sony, PlayStation and Google have been brought as 'class actions'. Class actions, or 'Group Proceedings' as they are known in Scotland, are court actions which allow two or more individuals, with the same, similar, or related claims, to come together to raise proceedings as a single action.

The proceedings raised against Sony, PlayStation and Google adopt the 'opt-out' mechanism, which contrasts with Scotland's 'opt-in' procedure. But what is the difference?

Opt-out or Opt-in – What's the difference?

Opt-out actions automatically include any potential member of the class unless they expressly choose to be excluded. The opt-out model is extremely popular internationally, particularly in the US. In theory, an individual could become a party to the action without even knowing about the proceedings.

By contrast, opt-in actions require individuals to apply to join the proceedings. This is the approach currently adopted by Scotland.

Scotland's approach

Group Proceedings were introduced in the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 ("2018 Act") and further developed upon by the 2020 Act of Sederunt (Rules of the Court of Session 1994 Amendments) (Group Proceedings) ("2020 Rules").

The 2018 Act introduced a framework that allowed for both opt-in and opt-out procedures. However, the 2020 Rules, which gave effect to new group proceedings legislation, only allow for the opt-in procedure to be operated for Group Proceedings. However, the Court of Session in Scotland is the first court in the UK (bar the Competition Appeal Tribunal) which is ready to roll-out the opt-out procedure.

The significance of 'opt-out' proceedings for Scotland

As can be evidenced through the cases proceeding against Sony, PlayStation and Google, the overall exposure of defenders facing an opt-out class action is seismic.

Were the Court of Session to provide Rules to provide for opt out procedure, it would place logistical pressure upon the Scottish judicial system, particularly if this provided a vehicle for collective redress not offered in England for non-competition claims.

The future

Group Proceedings are still considered to be a relatively new feature of the Scottish court system; however they continue to gather momentum. Only time will tell as to how matter progress and whether Scotland, in the future, adopts the 'opt-out' procedure alongside the 'opt-in' procedure.