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Mass lawsuits over antitrust breaches are a novelty in the UK. But cases are proliferating. In June, a University of East Anglia law professor secured funding to take Amazon to court over claims the US tech giant exploited sellers that used its platform.
That claim, estimated to be worth more than £2.5bn, is one of many. Google is also in lawyers’ sights. In June, a court gave a green light to a £13.6bn lawsuit alleging anti-competitive behaviour in online advertising. The case, dubbed speculative and opportunistic by Google, was brought by Ad Tech Collective Action, representing website publishers.
Not that they necessarily know about it. The UK has adopted an “opt-out” regime. That allows potential recipients of damages to be automatically included unless they choose not to be. It also explains why England accounts for nearly half of the class actions filed in Europe over the past five years.
Tech is not the biggest target. Half of the €120bn of class action claims lodged in the UK in the six years to 2022 concern the mining, energy and transport sectors. This is largely down to action over the 2015 Mariana dam collapse in Brazil, according to international law firm CMS.
But tech claims are growing fast, and not only in the UK. Over the six years to 2022, €12.4bn in class action lawsuits against tech companies were lodged in the claimant-friendly Netherlands, only €4.9bn less than in the UK.
Several factors explain the surge in UK litigation. Allowing opt-out claims is one, though the Mariana lawsuit shows that opt-in cases can also be costly. Another is the acceptability of third-party funding. Litigation funders’ assets increased more than 10-fold to £2.2bn in the decade to 2022, according to law firm RPC.
But tough public enforcement of antitrust is also important as private lawsuits generally piggyback on regulators’ rulings. Brussels and the UK have taken a feisty approach to reining in Big Tech.
Investors in deep-pocketed tech companies tend to brush off antitrust assaults. Even so, the companies privately deplore the spread of class action cases to Europe from the US. They argue it inflicts economic damage on business, clogs up the courts and primarily rewards lawyers and funders.
But private enforcement has a purpose. Class actions allow victims to obtain redress while reinforcing deterrence. They increase the incentive to bring anti-competitive behaviour to light and complement the work of regulators. That makes them a feature, not a bug, of the competition regime.