A different look for data protection litigation

On 15 February 2024, the UK Competition Appeal Tribunal (CAT) published its latest judgment in the Dr Liza Lovdahl Gormsen v Meta Platforms collective proceedings claim, potentially opening an alternative pathway for data protection litigation.

Bringing a claim in the CAT for abuse of a dominant market position is an attempt to circumnavigate the hurdles now faced by group litigation claimants in the UK courts, following the decision of the Supreme Court in Lloyd v Google. Following the submission of an amended claim form and updated causes of action by Dr Gormsen (as the Class Representative), the CAT has unanimously agreed that there are now triable causes of actions, and that the class action can proceed to trial.

Data protection claims as an abuse of dominant position

Dr Gormsen’s first attempt at bring the claim before the CAT, on behalf of approximately 45 million UK Facebook users, was met by a judgment on 20 February 2023, in which the CAT highlighted concerns with the case and stayed the application to enable her to file additional evidence setting out a “new and better blueprint leading to an effective trial”.

The claimant filed an amended claim form, containing updated allegations, and making an important distinction between “On-Facebook” and “Off-Facebook” data. “Off-Facebook Data” is defined as user data from activity on (i) Meta products and services other than facebook.com and (ii) third-party websites and apps, where as “On-Facebook Data” is data collected purely by facebook.com itself.

The amended claim form focuses on two key causes of action:

• Meta’s collection of Off-Facebook Data is an abuse of dominance because it was a condition imposed on users pursuant to a “take-it-or-leave it” offer for the social network services provided by Facebook (the “Abuse of Dominance Allegation”); and
• Meta’s collection of Off-Facebook Data involves the imposition of an unfair price within the meaning of the test established by United Brands v Commission (unfair price allegation).

The abuse of dominance allegation alleges that Meta imposed collection of off-facebook data as a condition of providing Facebook social network services. The claim goes on to argue that:

• There was no reason why Meta could not offer exactly the same Facebook service to users providing only on-facebook data;
• The “take it or leave it” approach deprives users of an important choice regarding their personal data;
• Given the value of the off-facebook data, users should have the opportunity to bargain over the terms on which their data is used. This was not done due to Meta’s alleged dominance, which meant the terms are unfairly imposed and there is no chance for competition between providers regarding the use of personal data of platform users.

The CAT noted the importance of the focus on off-facebook data. Given this focus, it considered that the claim is both “arguable as an abuse and capable of proper management to trial”.

The unfair price allegation alleges unfair pricing by reference to the United Brands test, which involves consideration of whether a price set by a dominant undertaking is first excessive and – if excessive – is unfair. The price in question here is the collection and use of data. The claimant’s argument is that Meta’s shift from a price-based solely on on-facebook data to a price-based on on-facebook data plus off-facebook data was both excessive and unfair. It is suggested that the Facebook product was profitable and viable at no price to the user using only on-facebook data, whereas off-facebook data generates huge monetary value for Facebook (for example, via advertising) but collection of off-facebook data was undertaken without a corresponding value transfer to users, resulting in an unfair and abusive price. The Tribunal, while noting that the point could “doubtless be better put”, accepted that the case as pleading is arguable and manageable to trial.

What’s next?

The CAT has now granted Dr Gormsen’s application for a collective proceedings order and the issues as set out above will now proceed to trial in the CAT. A date has not yet been set down as at the time of this article.

This certification of the claim has opened an alternative pathway in data protection litigation. While this is a particularly unique case, considering Meta’s dominance in the social media market (being the owners of Facebook, Instagram and WhatsApp), it remains to be seen whether any further actions of this nature will be seen again in the CAT. What will remain, however, is any judgment following the trial of the current matter, in which the CAT will most likely assess data-privacy rights and quantify the value of this personal data.

UK courts have previously considered that some actual damage or loss would have to be evidenced, for data protection-based claims to successfully be established. Should this action see success within the CAT, it will potentially be the first step in establishing that personal data inherently has a value, particularly where data controllers are able to monetise and profit from such data, potentially opening up new grounds for other data protection claims.

Contributed by Johnson Zhuang, associate, and Rosehana Amin, partner, Clyde & Co