Ronit Kreisberger QC and Michael Armitage act for class representative as Google sued for excessive and unlawful charges on its Google Play Store

Ronit Kreisberger and Michael Armitage, instructed by Hausfeld, are acting for Liz Coll, the proposed class representative in a proposed opt-out representative action against Google. A claim has been filed today in the Competition Appeal Tribunal against Google on behalf of an estimated 19.5 million eligible UK users of smartphones and tablets running on Google’s Android operating system. Estimated damages run up to £920 million.

The claim alleges that Google unfairly restricts consumers from accessing potential competition from other app distributors, by requiring smartphone manufacturers to pre-install a bundle of Google’s proprietary apps and services including the Google Play Store as well as allegedly imposing other contractual and technical restrictions. The vast majority of Android smartphone and tablet users in the UK are thought to depend upon the Google Play Store for their access to apps.

The overwhelming majority of customers are alleged in the Claim to be steered to the Google Play Store, and therefore to Google’s own payment processing system, which then typically charges a 30% commission on every digital purchase which allegedly goes straight to Google.

Ms Coll’s case is that this practice is anti-competitive and unlawful, and that Google would be unable to charge customers such excessive and unfair commission if the Play Store were genuinely open to competition, and alleges this conduct violates section 18 of the UK Competition Act 1998 and Article 102 of the Treaty on the Functioning of the European Union.

Ronit comments “this proposed claim is another important addition to the CAT’s burgeoning CPO case load; and further proof that the class action regime in the CAT is seen as a robust and effective means of seeking collective redress for UK consumers.”

For further information, see news release issued by Hausfeld here.

The claim has been reported in the news, including: BBC News; Bloomberg; City AM; The i; The Sun; The Telegraph (subscription only).

Ewan West, acting for the Government, sees Judge set aside face mask procurement challenge on basis of procedural irregularity

The High Court has ruled that the latest challenge to the U.K. health department’s process for awarding contracts during the COVID-19 pandemic should not be allowed to go ahead as the claim was not served validly.

The group action, brought by the Good Law Project, alleges breach of the procurement regulations and apparent bias and challenges the lawfulness of two contracts for face masks awarded to Pharmaceuticals Direct Ltd. However, the central issue to this judgment was whether there was valid service of the claim form in these proceedings; if not, whether the court should rectify any deficiency or extend time for service of the claim form.

Contrary to the court procedure rules, this action was not served on the government within the required seven days of the lawsuit being issued in April. The claimant’s argument was that the legal team’s failure to comply was “minor and technical.” The Defendant’s application to set aside the claim was summarised as follows: “This is not a case in which the Claimant should have had any difficulties in effecting valid service. It made a careless mistake in emailing the claim form to the wrong address. If the court were to grant the Claimant’s application, the Defendant would suffer prejudice in that it would be deprived of an accrued limitation defence to the claim.”

The Claimant’s application was dismissed.

This judgment will be of interest to all public law and procurement practitioners, as it is concerned with valid service of the claim form in a judicial review context.

Ewan West, instructed by the Government Legal Department, represented The Secretary of State for Health and Social Care.

Read full judgment here. A detailed case note by Imogen Proud is here.

High Court grants permission to challenge domestic implementation of UK-Morocco Association Agreement

The High Court has granted Western Sahara Campaign UK (“WSCUK”) permission to challenge the grant of preferential tariff treatment to goods from Western Sahara but designed by Morocco as “Moroccan” for purposes of the UK-Morocco Association Agreement.

WSCUK contends that the provisions of the agreement which purport to extend to Western Saharan resources are contrary to the principle of self-determination and treaty law prohibiting the imposition of obligations on a third party without consent.

WSCUK contends that the provisions of the agreement (and secondary legislation incorporating the relevant terms of that agreement) which purport to apply to Western Sahara must be read down. If such a compatible interpretation is not possible, WSCUK contends that domestic implementing legislation giving effect to the UK-Morocco Association Agreement must be treated as ultra vires Sections 9 and 28 of the Taxation (Cross-border Trade) Act 2018, since it fails to “give effect” to the treaty obligations and to have regard to international obligations in doing so, as required by the enabling act.

The central issue at the permission hearing was whether the claim was barred by the foreign act of state doctrine. In a reasoned permission decision, the High Court rejected the argument that the claim was non-justiciable on grounds of foreign act of state, finding that it was at least arguable that the claim falls within the public policy exception to the doctrine.

This is the first occasion on which the domestic courts have been called upon to interpret one of the UK’s new post-Brexit trade agreements and rule on the legality of the domestic implementation of that agreement by reference to principles of international law.

Conor McCarthy has been instructed by Leigh Day for the Claimant in this case.

Valentina Sloane QC is successful in Court of Appeal case on scope of HMRC assessment powers

In a decision of significance for public bodies, the Court of Appeal has held that HMRC has power to raise assessments against public bodies who have been overpaid VAT refunds under section 41 of the Value Added Tax Act 1994.

Milton Keynes Hospitals NHS Foundation Trust argued that HMRC’s power to make an assessment under section 73 (2) of the Value Added Tax Act 1994 did not apply where the person to whom the refund was made under section 41 (3) is not a taxable person as regards the supplies which were the subject of the refund. They contended that the effect of the Principal VAT Directive and the domestic legislation implementing it is to put a public body performing statutory (non-business) functions outside the scheme of VAT.

The Court of Appeal dismissed the Trust’s appeal.

Valentina Sloane QC represented HMRC at all stages. A link to the decision by the Court of Appeal is here.

Julianne Morrison represents appellants as Appeal Court rules immigration data protection exemption is unlawful

An Immigration Exemption within the Data Protection Act 2018, which allowed the Government and others within the private sector a blanket power to refuse information and use it secretly has been ruled unlawful. The court of Appeal was unanimous in concluding that the Government’s “Immigration Exemption” is incompatible with the requirement for such exemptions as outlined under Article 23(2) of the EU General Data Protection Regulation (GDPR). A further hearing will take place later in the summer to determine how to fix the unlawfulness.

The appeal was brought by Open Rights Group, a digital rights organisation that seeks to promote and uphold privacy and data protection rights and the3million, a grassroots organisation of EU citizens resident in the UK, with an intervention in the Court of Appeal case brought by the Information Commissioner.

Open Rights Group and the3million had argued that the Immigration Exemption is unlawful because it is overbroad and there are no legislative safeguards in place to protect against unnecessary and disproportionate interference with the fundamental rights of data subjects.

Julianne Kerr Morrison, led by Ben Jaffey QC of Blackstone Chambers, and instructed by Waleed Sheikh and Erin Alcock of Leigh Day, represented the appellants Open Rights Group and the3million.

See Leigh Day news release and judgment for further information.

Will Hooper acts for buyer as Court of Appeal hands down judgment in $44m Ferrari dispute

The Court of Appeal has handed down its judgment in the long-running saga about the ownership of the original gearbox of a 1962 Ferrari 250 GTO sold for US$ 44m in 2018. The GTO was sold and delivered by the Appellant seller, Mr Carl, to the Respondent buyer, Gregor Fisken Limited (“GFL”) but, as the sale contract recognised, without the original gearbox which had gone missing. The contract contained various provisions concerning the seller’s obligations to deliver up the gearbox to the buyer should he be able to find and retrieve it. In certain circumstances, he was entitled to a fee of US$ 500,000 for his efforts in so doing. The gearbox was subsequently discovered, the parties fell out, and GFL sued the seller for specific performance of the obligations to deliver up the gearbox.

The seller had argued at first instance that GFL was not a proper party to sue on the contract, lacking standing on the alleged basis that it had acted at all times as an agent for a disclosed but unidentified principal. GFL had been described as an agent in the header to the contract, but had signed it in an unqualified manner. As a matter of fact, GFL was not an agent: it had resold the GTO to a third party.

The seller also maintained that, if GFL was a proper party, it had repudiated the contract and could not enforce the seller’s obligations to deliver up the gearbox. In the alternative, if the contract remained in force, the seller claimed entitlement to the US$ 500,000 in exchange for delivering up gearbox.

The High Court held that GFL was a proper party to sue, there had been no repudiation, the seller was obliged to deliver up the gearbox and was not entitled to the US$ 500,000. The seller’s principal argument on appeal was that GFL lacked standing. The Court of Appeal rejected that argument, affirming GFL’s right to sue on the contract and to the gearbox. The Court of Appeal further confirmed that there had been no repudiation by GFL, but that the seller was to be paid the US $500,000 for his efforts in locating and retrieving the gearbox, as well as the shipping costs for sending the gearbox to GFL. Otherwise, the Court dismissed the appeal.

The Court of Appeal’s judgment will be of particular interest to car enthusiasts, the motor industry, and commercial practitioners alike. It also includes detailed analysis of the signature principle which dates back 150 years, and shows that when, as to apparent capacity, there is a mismatch between description and signature in a contract, it is the signature which prevails. The Court expressly affirmed that principle.

The Court of Appeal’s judgment is available here.

William Hooper appeared for GFL, instructed by Simon Walton and Nick Leigh of Rosenblatt.

ECHR Grand Chamber Issues Landmark Judgment on Surveillance and Data Protection

The Grand Chamber of the European Court of Human Rights has handed down a landmark judgment on the compatibility of bulk surveillance regimes with the ECHR.

In the joined cases of Big Brother Watch, 10 Human Rights NGOs and Bureau of Investigative Journalism v United Kingdom the Court held that the former UK bulk interception regime in the Regulation of Investigatory Powers Act 2000 was incompatible with Articles 8 and 10 of the European Convention on Human Rights. The Court found that the regime was incompatible with the right to privacy more generally and specifically as regards the right of journalists to the protection of journalistically confidential information.

The Grand Chamber’s judgment marks a significant evolution of the court’s case law on these issues and has potential implications for the UK’s current surveillance legislation, the Investigatory Powers Act 2016.

The Court held that while it is, in principle, within a state’s margin of discretion to operate a bulk surveillance regime, it must have detailed and effective safeguards to ensure that any interference with Convention rights is necessary and proportionate.  The safeguards must be “end- to-end”, covering the entire process from the interception of information through to its destruction. The Court laid down detailed new guidance as to what these safeguards must entail, including as regards judicial or independent authorisation and supervision of the surveillance process. The Court found that the Regulation of Investigatory Powers Act 2000 did not provide for adequate safeguards and was therefore incompatible with the Convention.

As regards journalistically confidential information and the right to source-protection, the Court said that specific additional protections are required.  The Court held that judicial or independent authorisation is required prior to the use of selectors or search terms which would make the obtaining of confidential journalistic material highly probable. The use of such search terms could only be “justified by an overriding requirement in the public interest”. Where journalistic material is obtained inadvertently, the continued storage and examination of such material is only permissible where approved by a judge or independent body on grounds of overriding public interest. As the UK regime lacked these safeguards the Court found that it was inconsistent with Articles 8 and 10 ECHR.

Conor McCarthy was instructed by the Bureau of Investigative Journalism before the Chamber and Grand Chamber.

Eric Metcalfe was instructed by Liberty, the ACLU and 5 other international human rights groups before the Chamber and by ARTICLE 19 as third party intervener before the Grand Chamber.

CAT upholds CMA finding of jurisdiction over Sabre merger

The Competition Appeal Tribunal has handed down judgment in Sabre Corporation v. CMA, a significant case concerning the CMA’s jurisdiction over mergers under the Enterprise Act 2002.

The case concerned an intended merger between Sabre Corporation and Farelogix Inc, companies which provide technology and software to airlines. The CMA found that it had jurisdiction over the merger on the basis of the share of supply test and concluded that the proposed merger may be expected to give rise to a substantial lessening of competition in two markets: the supply of merchandising solutions to airlines and the supply of distribution solutions to airlines, both of which are worldwide markets. The CMA prohibited the merger.

Sabre challenged the description of services used by the CMA to assess the share of supply test, the application of the share of supply test to Farelogix’ contractual arrangements with BA in the UK and the determination of whether the merger gave rise to an increment over Sabre’s existing share of supply. The CAT upheld the CMA’s findings on each of these issues. The judgment contains detailed consideration of a number of sub-sections of section 23 of the Enterprise Act which have not been in focus in previous cases, as well as a detailed consideration of the standard and intensity of review which ought to be adopted by the CAT in relation to findings of jurisdiction.

Rob Williams QC and Conor McCarthy, were instructed by the CMA.

Tim Ward QC, Nik Grubeck and Alison Berridge and were instructed by Skadden, Arps, Slate, Meagher & Flom on behalf of Sabre Corp.

First post-Brexit case on WTO law in domestic judicial reviews

Daniel Beard Q.C., Brendan McGurk and Jack Williams acted for Heathrow, Global Blue and WDFG in the first post-Brexit case considering WTO law in domestic proceedings, Heathrow Airport v HMT [2021] EWCA Civ 783.

The Claim concerned HMRC’s and the Treasury’s decision to abolish two long-standing VAT schemes, namely HMRC’s extra-statutory concession (“the ESC”), which allowed VAT-free airside sales of goods to passengers travelling outside the EU; and the VAT Retail Export Scheme (the “VAT RES”), which allowed refunds of VAT on landside sales of goods to non-EU travellers subject to certain conditions being met (together, “the Schemes”).

In deciding to abolish the Schemes, HMRC and the Treasury relied upon their understanding of the UK’s WTO law obligations, in particular the Most Favoured Nation (“MFN”) principle. The decision was partly based on a justification that it was necessary either to abolish the VAT RES or to extend it globally, else it would not be compliant with non-discrimination obligations in WTO law.

Lord Justice Green and Mrs Justice Whipple (sitting as both the Court of Appeal and Divisional Court) dismissed Heathrow’s appeal and application for judicial review. However, in doing so, they rejected the Defendants’ contention that the matter was non-justiciable, and made findings as to the appropriate test and standard of review when considering questions of public international law in domestic judicial review proceedings. The judgment’s findings and reasoning will be of great interest to all public law practitioners, but are especially important in a post-Brexit world where public authorities choose to take into account WTO law and other public international law instruments into account in their decision-making. See, in particular, [135] – [183] of the Judgment.

The Judgment also provides a detailed exploration of the interaction between UK-EU Trade and Co-operation Agreement (“the TCA”) and the EU (Future Relationship) Act 2020, which will be of broader application and interest: see, for example, [224] – [239].

CAT rules on mitigation defence in Trucks litigation

Royal Mail and BT v DAF Trucks Limited [2021] CAT 10

The Competition Appeal Tribunal has delivered an important judgment on the implications of the Supreme Court’s decision in the interchange fee litigation for other competition damages claims (Sainsbury’s v Visa Europe [2020] UKSC 24).

Royal Mail and BT are seeking damages from DAF arising from the European Commission’s 2016 infringement decision relating to Trucks. Their claims are the first of several to be set down for trial, with the trial due to commence in April 2022. Following the Supreme Court’s decision in Sainsbury’s, which considered issues of pass-on and mitigation, DAF applied to introduce a mitigation defence, arguing that the Claimants would have mitigated any overcharge arising from the infringement by negotiating costs reductions with their other suppliers. The Claimants opposed the application and, following a two day hearing in March, the Tribunal rejected it in a judgment issued this week.

The Tribunal held, in summary, that the Supreme Court’s decision does not permit a defendant to plead a defence of mitigation on the basis of broad economic theory alone (e.g. that a business faced with increased supply costs in one area will seek to compensate for that increase by reducing other costs). Rather, there must be some plausible factual basis for alleging that the claimant would have taken action to reduce its losses as a result of the overcharge. The Tribunal noted the evidential burden which would otherwise be imposed on claimants to demonstrate how they conducted their businesses, not only in in competition claims but in many commercial damages claims. The Tribunal acknowledged that a defendant is unlikely to have sufficient evidence available at the pleading stage to prove what the claimant did in response to the overcharge, but explained that it must nevertheless have some plausible factual foundation for the application of the economic theory relied on in order for the pleading to be permitted. Examples of the sort of points which could support a prima facie inference that other supply costs may well have been mitigated were given in paragraph 42 of the judgment. As a practical matter, the Tribunal noted that DAF could reapply for permission to introduce a mitigation plea once it had reviewed the Claimants’ disclosure.

The Tribunal’s judgment provides important guidance on the requirements for a pleading of mitigation. It will be of keen interest to competition practitioners and commercial practitioners more generally.

Royal Mail and BT were represented by Ben Lask and Anneliese Blackwood. DAF was represented by Daniel Beard QC, Rob Williams QC and Daisy Mackersie.

A copy of the judgment in here.