The value of UK competition class-actions surged last year, according to new data published today, following the filing of a series of multi-billion-pound claims against some of the world’s biggest tech companies, including Apple, Google and Sony.
The value of class-action lawsuits filed in the UK over claims around anti-competitive behaviour surged six-fold over the past year, from £4bn in 2021 to £26bn in 2022, research by Thomson Reuters shows.
The six-fold surge in value came as the number of competition class-actions filed in UK courts increased from a total of six in 2021 to eight the following year.
The increase follows the filing of a series of high-profile, multi-billion-pound class-action lawsuits against companies including Sony, Google and Apple over alleged breaches of competition rules.
The world’s tech titans, including Apple and some of the world’s top crypto exchanges including Binance and Kraken, have faced the brunt of the UK’s recent competition class action wave, the research shows, as it notes 10 of the 14 class-actions filed over the past two years were against global tech companies.
Sony is currently facing a £5bn lawsuit over claims it abused its market position to overcharge customers who purchased digital games or in-game content via the PlayStation store, while Apple faces a £1.46bn claim over allegations it abused its monopoly power by overcharging customers through the App Store.
Meanwhile online publishers last year filed a £13.6bn lawsuit against Google, and its parent Alphabet, over claims it abused its dominant position in online advertising, depriving website owners of revenue.
The uptick in value also comes as the UK is increasingly becoming a major class-action hub, due to new rules allowing for opt-out lawsuits and the growth of the country’s litigation funding sector.
The new rules, introduced in 2021, let single claimants bring lawsuits forward on behalf of potentially huge numbers of people, on an opt-out basis.
The UK’s Competition Appeals Tribunal (CAT) first set a precedent to allow opt-out lawsuits to be brought forwards in 2021, after giving the green light to a £14bn class-action against Mastercard, over claims it overcharged 46m UK customers for cross-border transactions.
Litigation funders, who bankroll claims with a view to taking a cut of any winnings, have flocked towards financing these class-actions, due to the high value of such claims and the relative low risk of funding them. The costs of bringing forward such claims mean claimants often seek out third-party funding to cover legal fees.
In regards to competition cases specifically, the risk associated with backing such lawsuits is often particularly low due to liability have already been shown in EU law, which forms the basis of UK competition law.
Thomson Reuters competition expert Warsha Kalé said: “Litigation funders have plenty of dry powder to deploy, adding a whole new level of risk for corporates who’s activity strays over the line and can be shown to breach competition law.”
The research follows warnings that a lull in the private equity market, caused by higher interest rates, could lead to a downturn in the litigation funding sector, that could in turn hit legal sector revenues on a wider basis.