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Large-scale antitrust lawsuits are rare in the UK, but they are proliferating: In June, a law professor at the University of East Anglia secured funding to sue US tech giant Amazon for exploiting merchants who use its platform.
The lawsuit, estimated to be worth more than £2.5 billion, is one of several. Google has also been targeted by lawyers. In June, a court approved a £13.6 billion lawsuit alleging anti-competitive behaviour in online advertising. The lawsuit, which Google has described as speculative and opportunistic, was brought by AdTech Collective Action, which represents website operators.
They don’t necessarily know it: the UK has an “opt-out” system, which means potential recipients of damages are automatically included unless they want to. It also explains why England accounts for almost half of all class action lawsuits filed in Europe in the past five years.
The tech industry is not the biggest target: half of the €120 billion in class action claims filed in the UK in the six years to 2022 relates to the mining, energy and transport sectors. This is mainly due to litigation over the 2015 Mariana Dam collapse in Brazil, according to international law firm CMS.
But tech-related litigation is growing rapidly, and not just in the UK: in the six years to 2022, the plaintiff-friendly Netherlands saw €12.4 billion in class action lawsuits filed against technology companies, just €4.9 billion less than the UK.
There are several factors driving the surge in litigation in the UK. One is the allowance of opt-out claims, but the Mariana case shows that opt-in litigation can also be costly. Another is the acceptability of third-party funding: litigation funder assets grew more than tenfold in the decade to 2022 to £2.2 billion, according to law firm RPC.
But strong public enforcement of antitrust laws is also important, as private lawsuits typically piggyback on regulatory rulings. Brussels and Britain have taken a tougher stance to rein in big tech companies.
Deep-pocketed tech investors tend to downplay the antitrust attacks, but companies privately bemoan the spread of class-action lawsuits from the U.S. to Europe, arguing that they harm companies financially, crowd out the courts and benefit primarily lawyers and funders.
But private enforcement has a purpose: class actions provide relief for victims and increase deterrence; they increase incentives to expose anticompetitive conduct and complement the work of regulators; and so class actions are a feature of the competitive regime, not a flaw.
vanessa.houlder@ft.com
