UK Sees Massive Rise In Class Actions Targeting Tech Titans

Class action lawsuits filed in the UK have risen dramatically over the past two years, with tech giants a key target, according to new research from Thomson Reuters.

The research found that the damages being sought in collective proceedings in the UK rose from £4bn in 2021 to £26bn in 2022.

Ten of the 14 class actions filed over the past two years were against tech multinationals, including Apple, Google and Sony.

Prominent cryptocurrency firms Binance and Kraken have also been targeted by such actions.

Legal shift

A legal change in 2021 allowed individuals to sue on behalf of potentially huge numbers of claimants without their express mandate or knowledge, unless they expressly opt out.

The UK’s Competition Appeal Tribunal (CAT) set the precedent by allowing an opt-out lawsuit to be brought against Mastercard, over claims it overcharged 46 million UK customers for cross-border transactions.

Only two other jurisdictions in Europe, Portugal and the Netherlands, offer these opt-out class actions.

Online publishers last year sued Google and parent Alphabet for £13.6bn over claims the firm abused its dominant position in online advertising and deprived website owners of revenue.

Sony has been sued for £5bn over claims it abused its market power to overcharge customers buying digital games or in-game content via the PlayStation Store.

Competition claims

And Apple is similarly being sued for allegedly abusing its market power to overcharge customers through its App Store.

Dr Liza Lovdahl Gormsen, a senior adviser to Britain’s Financial Conduct Authority (FCA) watchdog and a competition law academic, last year said she would bring a £2.3bn class action against Facebook parent Meta over claims it abused its market dominance by exploiting the personal data of 44 million users. The action is currently awaiting a hearing to determine whether it can be brought forward.

“With this kind of class action gaining popularity, corporates have to be wary of acting in what could be seen as an anti-competitive way,” said Thomson Reuters competition lawyer Warsha Kalé.

“Fines for anti-competitive behaviour in the UK can already be as much as 10 percent of a businesses’ worldwide turnover.

“Now, a business can pay that fine and then find themselves facing a separate class action composed of tens of thousands, or even millions, of customers.”