UK tribunal rejects application for £2.3 billion class action suit against Meta News
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UK tribunal rejects application for £2.3 billion class action suit against Meta

The UK’s competition tribunal Monday rejected an application for a £2.3 billion class action  lawsuit which accused Facebook’s parent company Meta of “unfair trading conditions.” The Competition Appeal Tribunal decided that the application did not meet the standard of quality required for the class action to move forward.

Dr. Liza Lovdahl Gormsen filed the application under section 47B of the Competition Act 1998, which allows for people to file claims as a group against another party before the tribunal. Lovdahl Gormsen claimed that, from 2016 through 2019, Meta required consumers to give up large swathes of their personal data in order to use the app. The data was then sold to advertisers to make “excess” profit. Lovdahl Gormsen said this created “unfair trading conditions,” which was made worse by Meta’s dominant position in the market.

Central to Lovdahl Gormsen’s evidence was an economic expert’s methodology which she used to calculate the “excess” profits Meta made with the allegedly unfair practices. In assessing Lovdahl Gormsen’s application, the tribunal had to decide if this evidence was enough for the application to pass the Pro-sys test. The Pro-sys test requires that any “expert methodology must be sufficiently credible or plausible.” In other words, the outlined methodology must be “realistic,” not just “theoretical or hypothetical.” The results of the Pro-sys test are then used to determine whether it is justifiable to continue the case, factoring in a cost benefit analysis.

The tribunal found that the application “unequivocally” failed the Pro-sys test. The proposed methodology was not deemed to have enough of a “legal basis,” and ignored that Meta’s “excess profits” could have come from other sources than consumers. Therefore, the tribunal held:

[W]e can see no point in permitting an untriable case to proceed to trial, and a number of very good reasons to stop it from so proceeding, namely wasted costs, wasted time and the public interest in this Tribunal hearing and disposing of matters that cannot, whatever their merits, be properly tried.

The court granted a stay and allowed for a six-month period within which the application can be resubmitted with additional evidence for reconsideration. Conversely, Lovdahl Gormsen could choose to apply for an extension.  However, if neither action is taken, then the application will be formally rejected and the class action will not proceed.

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