Meta successfully resists CPO on the basis of the Pro Sys v Microsoft test

21/02/23

On 20 February 2023 the Competition Appeal Tribunal (Marcus Smith J, Derek Ridyard and Timothy Sawyer CBE) rejected an application made by Dr. Liza Lovdahl Gormsen for an opt-out collective proceedings order, and stayed the PCR’s application for a period of six months.

The PCR was seeking an aggregate award of damages totalling £2.3 billion on behalf of 45 million users in respect of alleged abuses of Meta’s dominant position in the market for personal social network services.

Meta resisted certification on the basis that the PCR had failed to put forward a plausible methodology that would serve as a blueprint for a trial of any of the alleged abuses.

The CAT agreed with Meta, and held that there were “significant methodological difficulties” with the PCR’s proposed approach.  In particular the CAT accepted Meta’s criticism of the PCR’s proposed counterfactual analysis, which it said “went very badly wrong” because “it assumes that which needs to be established”.  In the CAT’s view, a credible methodology for quantifying loss in this case would have to grapple with the two-sided nature of the market (for users and advertisers), the individualised nature of any “consumer surplus” and the difficulties in calculating the cost of Facebook’s services.

In staying the application so as to provide the PCR a further opportunity to file a “new and better blueprint leading to an effective trial”, the CAT warned that the PCR’s methodology “will need a root-and-branch re-evaluation, and mere tinkering will not do.”

The judgment is here.