The three-member bench of the tribunal has stayed the mass action for a period of six months to allow the lawsuit representative to submit additional evidence to proceed further and if no additional evidence is provided, the stay will be lifted and the collective lawsuit will be rejected
The UK Competition Appeal Tribunal temporarily blocked a £3bn collective lawsuit against Meta. (Credit: Nokia621/Wikimedia Commons)
The UK Competition Appeal Tribunal has temporarily blocked a mass action valued up to £3bn against Meta Platforms, Meta Platforms Ireland, and Facebook UK over alleged abuse of their dominant position in the market.
The three-member bench of the tribunal has stayed the mass action for a period of six months and has asked the lawsuit representative to submit additional evidence to proceed further.
The mass action was initiated by Liza Lovdahl Gormsen in February 2022 for a collective proceedings order (CPO) under section 47B of the Competition Act 1998 against the social media platform.
Gormsen accused the Facebook parent company to have abused its dominant position to monetise users’ personal data.
Besides, Gormsen alleged that Facebook users were not fairly compensated for the value of personal information they were required to submit in order to use the platform.
The mass action against the social media major is being fought by Gormsen as a proposed class representative (PCR) on behalf of nearly 45 million Facebook users in Britain.
The tribunal said that it considered that there were two vital points to address for determining the CPO application. The first of which is whether the CPO application met the test in Pro-Sys Consultants vs Microsoft (the Pro-Sys test).
The second point is whether under rule 79(2)(b) of the Competition Appeal Tribunal’s Rules, the continuation of the proceedings could be justified on the basis of cost/benefit.
In a statement, the tribunal said: “The Tribunal considered that the problems identified in respect of the application of the Pro-Sys test to the CPO Application mean that no cost/benefit analysis can be properly carried out at this stage.
“For the reasons set out in the Judgment, the Tribunal proposes to stay the CPO Application for a period of six months to enable the PCR to file additional evidence setting out a new and better blueprint for the effective trial of the proceedings.”
The tribunal also stated that if no additional evidence is provided to further proceed with the trial, it shall lift the stay and reject the collective lawsuit.
Recently, Meta reported a decrease of 55% in net income to $4.65bn for the fourth quarter of 2022, compared to $10.28bn in the same quarter of the previous year.