Court of Appeal refuses certification challenge in Gormsen v Meta

In an ongoing data-focused competition law mass action, the court has dismissed Meta’s argument meaning that Dr Lovdahl Gormsen’s claim will now proceed towards trial in 2026.

The CAT has acknowledged that the claim is raised in “an unfamiliar and novel context, namely data or information abuse”. The Court of Appeal decision confirms this changing landscape of competition law and highlights the increasing scrutiny that tech companies face regarding their market practices.

In 2022, Gormsen issued a standalone, opt-out collective damages claim in respect of Meta’s alleged abuse of dominance in breach of competition law. Gormsen, the class representative for the action, is seeking approximately £2.3 billion in damages plus interest on behalf of around 45 million UK consumers.

Gormsen alleges that Meta exploited its dominant position by enforcing extensive and complicated business terms on Facebook users, leading to three infringements. 

First, Gormsen asserts that Meta imposed an "unfair data requirement," compelling users to provide personal information before accessing the social network's services.

Secondly, Gormsen claims that Meta enforced an "unfair price" policy, contending that users were not compensated for the company's access to and use of their valuable personal data, which Meta monetised through targeted advertising. Gormsen argues that the combination of on-Facebook data (collected on Facebook) and off-Facebook data (gathered through other Meta products and third-party apps) enabled Facebook to generate these advertisements.

Thirdly, Gormsen claims that the terms and conditions governing the use and sharing of users' personal data by Meta were convoluted, deceptive, and presented on a “take it or leave it” basis, constituting "unfair trading conditions”.

After initially not being certified due to inconsistencies in the economic analysis, the CAT allowed Gormsen six months to review her position, and the claim was subsequently certified in February 2024.

Meta appealed certification on the basis of two errors of law. First, that the CAT erred in permitting Gormsen to amend her claim and pursue the “unfair pricing test” and second, in the manner in which it assessed the unfair trading condition.

As regards the “unfair pricing test”, Meta asserted that the expert methodology consideration of the United Brands test, as pleaded by Gormsen, was flawed. The test, established in the landmark United Brands judgment of the CJEU, is used to determine whether a company’s pricing is excessively high and thus constitutes an abuse of dominance under competition law. It determines excessive pricing abuses in two parts: the price must be "excessive", meaning the difference between the cost of production and the selling price is too high (‘excessive limb’); and the price must be "unfair", either in itself or when compared to competing products (‘unfair limb’).

Meta argued that since its services are provided without monetary compensation, it cannot be determined that users surrendering their data unfairly surpasses the economic value of the product offered. Further, Gormsen’s analysis only considered the economic value of off-Facebook data and did not take into account the profitability of Facebook’s entire platform. Meta claimed that this incremental stance is impermissible as a matter of law.  

In addition, Meta alleged that, in regard to the “unfair trading condition” requirement, Gormsen had not pleaded a complete cause of action and failed to establish a coherent chain of causation. Gormsen responded that she had pleaded a position in line with the relevant case law and causation was established.

The Court of Appeal expressed some sympathy with Meta, in particular as concerned the second ground. The court appreciated that the case was a complex one and, factually, the grounds were intertwined such that if Meta succeeded on the unfair price ground, then the unfair trading conditions would fall away. However, the arguments presented did not meet the threshold to challenge the certification judgment, and the consideration of both grounds is to be determined at trial before the CAT. A reasoned decision will follow.