Collective Proceedings: Who Gets Carriage? UK Competition Appeal Tribunal Decides

The UK Competition Appeal Tribunal (CAT) recently issued its first-ever precertification ruling addressing a “carriage dispute” in the cases Hunter v. Amazon.com and Hammond v. Amazon.com. A carriage dispute arises where there exist two or more applicants for similar opt-out collective proceedings, requiring the CAT to determine which applicant is most suitable to act as the proposed class representative. 

The ruling[1] followed an order by the president of the CAT in September 2023 that “carriage” would be heard separate to, and before, the issue of certification. The proceeding was the first occasion on which the CAT heard a “carriage issue” as a preliminary issue in advance of the certification issue.

The resolution of a carriage dispute requires a relative assessment of the two applications, and it is a different assessment to that which the CAT is required to make at the certification stage.

Carriage Dispute Significance

The issue of carriage is materially important. The CAT’s consideration of a carriage dispute (when heard independently of, and prior to, certification) requires the CAT to determine which of the cases is most suitable to advance first to a certification hearing and whether the unsuccessful application should be dismissed or stayed pending determination of the certification. The CAT will dismiss an application that loses on the issue of carriage if the CAT considers the application to be hopeless.

For the successful applicant, this means that it may progress its case to a certification hearing, while the case brought by the unsuccessful applicant will be stayed (if not dismissed) pending determination of the certification. If the application for certification does not stumble, it becomes the lead case against the defendant.

If the costs of an unsuccessful applicant are being met by a litigation funder, the funder will be met with the choice of cutting its losses or leaving a substantial investment ringfenced on the off chance that it may become possible to progress the claim at a later date.

The proceedings in question concern standalone claims for damages arising out of an alleged abuse of dominance by Amazon through favoring its own retail offers over those of independent merchants trading on the website (a practice known as self-preferencing).

Since it found the two applications to be “sufficiently similar” in light of their overlapping class members and the similarity of the underlying claims, the CAT was precluded by its rules from making an opt-out collective proceedings order in respect of both claims. The CAT was instead required to decide which application should have carriage.

In resolving the carriage dispute, the CAT had regard to the principles set down by the UK Court of Appeal in Evans v. Barclays Bank plc,[2] namely that

• the CAT ought to apply a test of “suitability” in respect of each applicant in relation to which the CAT enjoys “broad and multifaceted” discretion;
• it is possible for the CAT to resolve the carriage dispute without taking account of the merits of either case;
• the mere fact that one putative class representative crafts a broader claim is not an indication that that claim is preferable; and
• the question of which claim was the first to file is largely an irrelevant factor.

Choosing a Methodology

In these proceedings, the CAT’s decision was heavily influenced by the methodologies proposed by the applicants to prove and quantify the alleged abuses and their effects. The first applicant proposed analyzing actual consumer preferences and establishing, through a consumer survey, a counterfactual on which to assess a consumer loss, while the second proposed to rerun or model Amazon’s algorithm without the alleged discriminatory elements.

The CAT found the second applicant’s approach more closely aligned with the alleged abuse and thus more suitable for advancing to a certification hearing. The CAT therefore decided in favor of the second applicant as the most suitable proposed class representative, staying the first applicant’s application with the possibility of revisiting it should the first applicant’s application fail at the certification stage or be revoked.

The CAT’s ruling signals a novel practice by the CAT to address the question of carriage as a preliminary issue prior to certification and thereby removing the delay and increased cost of a “rolled up” carriage and certification hearing. The ruling also emphasizes the CAT’s discretion in carriage disputes and its heightened focus on methodology as a key differentiator between competing applications.