Carriage dispute: Competition Appeal Tribunal finds in favour of Professor Stephan

The Competition Appeal Tribunal (CAT) handed down a judgment on 20 January 2025 adjudicating on the carriage dispute between BIRA Trading Ltd (British Independent Retailers Association) and Professor Stephan, a full-time academic and lecturer at the University of East Anglia (the Judgment).

Both parties applied to bring opt-out collective proceedings against Amazon for abuse of dominance in relation to the UK online Amazon marketplace. Despite acknowledging that an established trade association is generally a preferred class representative over an academic, the CAT found that the proposed scope and methodology adopted in Professor Stephan's claim were more favourable.

The Judgment provides useful discussion of the factors that the CAT will consider when faced with two similar applications for collective proceedings.

What is a carriage dispute?

As acknowledged by the CAT itself, carriage disputes are a relatively new phenomenon in the UK. They arise when two separate certification applications are made under the collective proceedings regime, and the applications overlap in relation to the proposed class, claim and defendants. The Competition Appeal Tribunal Rules 2015 provide for such a scenario, stipulating that the role of the CAT is to consider which applicant would be "the most suitable" (see Rule 78(2)(c)).  

Because of their relatively novel nature, the CAT considered the approach taken in other jurisdictions with established regimes for collective or class proceedings. Specific reference is made to the Ontario Class Proceedings Act 1992 which prescribes a determination of the proceedings that "would best advance the claims of the class members in an efficient and cost-effective manner".

BIRA's claim

The abuse alleged by BIRA is described as an "Unlawful Product Entry Strategy", with the focus being on Amazon using its abusive conduct to assist the launch of its own products for sale on the UK Amazon marketplace.

This alleged abuse is twofold and consists of:

Data abuse conduct. The use of non-public data supplied by merchants as a prerequisite to selling on the UK Amazon marketplace.
Other anti-competitive behaviour. Self-preferencing of Amazon's own products over independent merchants via the "Buy Box" feature which prominently features a single offer on a page.

Professor Stephan's claim

The alleged abuse advanced in Professor Stephan's claim is framed more broadly than BIRA's and has five distinct aspects:

Use of non-public seller data. This encompasses the data abuse conduct advanced by BIRA but framed in a more extensive way. It alleges additional harms not solely related to product entry strategy, including the use of data to approach suppliers of third-party sellers and negotiate terms of supply, decisions on stocking and setting product prices.
Self-preferencing Amazon products in the Buy Box feature. This mirrors the second allegation in BIRA's claim.
Self-preferencing of merchants using fulfilment by Amazon (FBA), Amazon's logistics services, in the Buy Box feature. This alleges that Amazon favours merchants' FBA offers, over offers that use own, or third-party, logistics services (fulfilment by merchants (FBM)). The harm alleged here is distinct to the other self-preferencing allegation and relates to competition in the logistics and delivery services, ie preventing FBM providers from achieving scale and driving costs higher.
Conditioning access to Prime on the use of FBA. The allegation that Amazon makes access to the Prime label, conditional on the merchant using FBA instead of FBM.
Anti-discounting practice. The allegation that Amazon places sanctions on merchants who sell products elsewhere for lower prices.

Why was Professor Stephan's application preferred?

The CAT set out a list of non-exhaustive factors which should be considered as part of a relative assessment to decide which application is preferable to proceed to certification.

Scope of the class

Despite the class sizes differing between the two applications, this was a neutral factor in the CAT's assessment.

The class representative

BIRA was deemed the more suitable class representative by virtue of being an established association and the fact that many of its members fall within the proposed class (which amongst other benefits would give them access to relevant information). Notwithstanding this, the CAT noted that Professor Stephan would not be unsuitable and notably, would be assisted by a "high-powered" consultative panel (including Lord Neuberger). The Judgment also notes the steps taken by Professor Stephan to satisfy himself with the terms of the litigation funding agreement (LFA) by taking advice from a specialist KC.

The lawyers

Both applications are represented by highly experienced solicitors and Counsel teams. As such this was a neutral factor in the CAT's assessment.

Funding and adverse costs cover

Regarding funding, Professor Stephen's LFA commits the funder to a higher amount, but the CAT acknowledged this reflects the wider scope of allegations. The Judgment discusses in some detail the provisions in Professor Stephan's LFA for settlement and termination (the latter consequently being amended). This was ultimately a non-issue.

The levels of return to the funders differ significantly between the applications. The return under Professor Stephan's application is substantially higher, however under the LFA any entitlement to such fees would be "payable out of undistributed damages" unless otherwise agreed under settlement and approved by the Tribunal. Because of this the CAT did not consider the funder's returns to be a factor favouring BIRA. Overall, the CAT considered the funding arrangements to be a neutral factor.

Regarding costs, both applications provide for any potential adverse costs order to be covered under the LFA as opposed to an after-the event policy. Again, this was a neutral factor.

Litigation plan

Both applications include detailed litigation plans pursuant to Rule 78(3)(c) and therefore this was a neutral factor.

Scope of the claims

There is significant divergence between the two applications on this factor, as discussed above. Professor Stephan's claim encompasses the allegations forming BIRA's claim (and on broader footing) as well as advancing further allegations. The Tribunal acknowledged that in some circumstances a narrower claim can be more efficient, but if done proportionately, the cost of advancing more claims and taking a broader approach could be more cost effective.

What appeared persuasive to the CAT was the fact that BIRA's claim, by excluding the additional allegations, would deny class members from potential compensation for other forms of "tenable abuse". These additional allegations advanced by Professor Stephan had been raised in various decisions by competition authorities (including the CMA, the Italian Competition Authority, and the European Commission) which potentially added weight to their inclusion in the claim and the CAT's thinking on this point. On this, BIRA did not seek to show the further allegations pursued by Professor Stephan were unarguable, which the CAT noted to be "unsurprising" considering they are concerns of competition authorities.

Methodology

The economic methodologies adopted in the applications are very different. One of the approaches proposed by BIRA's experts is "broad brush", which the CAT expressed concern is based on simplistic assumptions regarding the counterfactual. Conversely, the methodology advanced by Professor Stephan's expert was deemed to be "impressively well-developed".

A contextual point to flag here is that Professor Stephan's methodology is similar to that proposed in the Hammond Proceedings, (the collective proceedings application against Amazon at the consumer level – also previously subject to a carriage dispute). The Tribunal noted it is desirable that the same basic approach to quantifying the effects of Amazon's conduct be used in both proceedings, as they will be heard in parallel.  

Additional points to note for practitioners

In relation to the timing of the applications, the Judgment specifically notes that this is irrelevant (save for where significant delays are likely to be caused in the proceedings).
In this case, and unlike previous cases, the carriage dispute was heard separately and prior to the certification hearing to save extensive time and costs.
Whether the claim is opt-in or opt-out could also be a factor for relative assessment (this did not arise here as both applications were opt-out).