On 8 and 9 December 2021, the appeal court heard an appeal against a 25 February 2021 ruling of the High Court in a case between multiple investment funds, including Allianz Global, who are suing several banks, including Barclays and UBS, for their involvement in the foreign-exchange cartel. We reported on this ruling in Q2021-1. In the challenged decision, the High Court granted the banks permission to argue that the alleged damage that Allianz global and others had suffered as a result of the cartel were passed-on to investors who cashed out assets at reduced value.
During the two-day trial hearing, the investment funds expanded on their earlier argument that only the investment funds, and not the individual investors, had a cause of action. Their lawyer said that the shareholder had not suffered a loss that the law regards as separate and distinct from the company’s loss and that it could not be converted into a “recoverable loss” through a shareholder’s redemption of shares.
The banks, on the other hand, reiterated the principle and rule of EU competition law that allows anyone to claim damages for breaches of competition law. They said that the impact on the funds and the investors arose from exactly the same illegal conduct and that the investors therefore had a cause of action, just as the investment funds had cause of action.
The court will issue a ruling on this issue at a later date.[1]
[1] According to Mlex, ‘Banks can argue funds’ forex cartel losses were passed on, UK court hears’, 9 December 2021.
On 6 December 2021, members of the Rohingya community of Myanmar filed class action lawsuits in the United States and the United Kingdom against Facebook and its parent company Meta.[1] The plaintiffs argue that Facebook’s negligence amplified a campaign of grave human rights abuses and crimes against humanity against the Muslim minority of Myanmar. In particular, the plaintiffs claim that Facebook used algorithms to amplify hate speech against the Rohingya people, failed to invest in content moderators and fact checkers who spoke Burmese and understood the political situation in Myanmar, failed to remove hate speech, and failed to take appropriate and timely action despite extensive warnings from NGOs and the media from 2014 onwards. In these claims, the lawsuits make reference to the documents leaked by Facebook whistleblower Frances Haugen. The plaintiffs are demanding around €133.1 billion in total damages.
In the US complaint, the plaintiffs seek to apply Myanmar law if Section 230 of the Communication Decency Act is raised as a defence. Section 230 provides that platforms like Facebook cannot be held liable for the content posted by their users. It remains unclear whether the US will hear the claims under foreign law, which happens only in special circumstances.
While legal experts are unsure about the chances of success, due in fact to a lack of precedent, the lawsuit certainly served as a wake-up call for platforms like Facebook.
[1] US Class action complaint against Meta Platforms, Inc. & UK letter of notice regarding class action against Facebook UK
On 10 November 2021, the Supreme Court of the United Kingdom issued its long-awaited decision in the Google/Lloyd case.[1] The proceedings took place on the basis of the ‘representative action’ system, in which a representative member of the group litigates on behalf of the group (par, 3-5, 25). Lloyd litigated against Google on behalf of Google users for violations of privacy laws.
According to the Supreme Court, this representative action is not suitable for damage arising from privacy breaches because it requires the damage to be determined concretely and individually. The exact damage of each Google user differs per case and cannot be estimated. Therefore, the claim cannot succeed (par. 80, 86-87, 115 & 159). The Supreme Court did consider that in such cases of mass damage in the digital context, a collective action is the only possibility ‘to come at justice’ (par. 67). However, English law does not offer this possibility. The outcome of the case will likely affect a number of related privacy violation cases, all based on the system of representative action.
[1] UK Supreme Court 10 November 2021, 2019/0123 (Google/Lloyd)
On 4 October 2021, the Competition Appeal Tribunal (“CAT”) ruled on several procedural issues in the case between several claimants, including waste-management companies Suez and Veolia and car and machine tools business Wolseley and truck manufacturers that were involved in the truck cartel.[1] The judge ruled that the case would be heard over a maximum of six months, starting 9 April 2024. Furthermore, the judge said that he was not persuaded that it would be appropriate to include second-wave claimants in the trial because of additional complexities because of the need for additional factual investigations for different witnesses and corporate groups.[2]
On 5 October 2021, in another case management hearing in the present case, the judge ordered DAF to disclose market-wide leasing data. The claimants argued that they needed such data in addition to claim-specific leasing data in order to conduct a market-wide analysis. DAF opposed this but did not succeed, given the order of the judge. The CAT further ruled that test claimants had to provide disclosure on a stage by stage basis, starting with board papers and any annexes to those papers; that it should cover the entire period of the claim; and that it should be limited to those claimants at the trial.[3]
[1] Case references 1292/5/7/18 Suez Groupe SAS and Others v Fiat Chrysler Automobiles N.V. and Others; 1293/5/7/18 Veolia Environment S.A. and Others v Fiat Chrysler Automobiles N.V. and Others; 1294/5/7/18 Wolseley UK Limited and Others v Fiat Chrysler Automobiles N.V. and Others.
[2] According to Mlex, ‘UK truck-cartel damages trial to start in April 2024, competition court says’, 4 October 2021.
[3] According to Mlex, ‘Hearing in Uk trucks-cartel suit tackles disclosure and test claimant issues’, 5 October 2021.
On 9 December 2021, an appeal court in Stuttgart handed down a judgment in a truck cartel follow-on action in favour of truck manufacturer Daimler.[1] In 2018, the lower Stuttgart court ordered Daimler to pay compensation to two German construction firms on account of its involvement in the truck cartel.[2] The firms were seeking damages of around €300,000 as compensation for purchased trucks and overpriced liability insurance premiums. After several rounds of appeal before the Stuttgart appeal court (which upheld the judgment at first instance) and the Federal Court of justice (which overturned the appeal court ruling),[3] the case was sent back for reconsideration by the Stuttgart appeal court. The Federal Court of Justice said the appeal court had erred in finding that the claimant construction firms suffered damage because of the cartel. In reaction to the judgment, Daimler declared the following in a statement: “We are still convinced that our customers haven’t suffered any damage. The EU Commission didn’t make any determination in its decision on the question of damage to customers. In addition, there are already some final judgments dismissing actions.”[4]
[1] Stuttgart higher regional court, 2 U 101/18.
[2] Stuttgart regional court, 45 O 1/17.
[3] Federal Court of Justice, KZR 35/19.
[4] According to Mlex, ‘Daimler overturns truck-cartel claims ruling in Stuttgart appeal court’, 10 December 2021.
In a 27 September 2021 decision published in Q4 in a follow-on action in the context of the truck cartel, the Dortmund District Court assumed that the cartel caused harm. The District Court held that the European Commission’s fining decision contains significant indications demonstrative of the cartel’s price effect. The District Court referred to the cartel’s length, broad market coverage (in this case, more than 90% in the EU and nearly 100% of the German market), lack of product substitutability and degree of organisation, among other things. Referring to established economic theories and empirical research, the District Court held that these factors are core indicators generally indicative of a cartel-related price increase (the empirical principle).
The District Court accorded particular weight to the empirical principle due to the contradictory nature of the expert evidence that the parties had submitted. Nor do the submitted expert statements cancel each other out, according to the District Court. The District Court nevertheless held that the indications led, in any event, to the assumption of a certain extent of damage.
The question of whether it is possible to determine the level of damages and/or conduct an expert investigation to that end will be dealt with at a subsequent stage before a decision is rendered in the present case.
On 29 December 2021, the Amsterdam District Court rendered judgment in the case of The Privacy Collective (hereinafter: TPC) v. Oracle and
Salesforce.[1] TPC asserts that Oracle and Salesforce collect the personal data of Internet users and sell this information to third parties to enable them to offer personalised ads, among other things. In addition, TPC asserts that Oracle violated the privacy of Dutch Internet users in a data breach. TPC is therefore seeking, among other things, damages in this class action suit. Rather than address the substance of the case in this judgment, the District Court assessed the admissibility of TPC’s claim.
All admissibility requirements of Article 3:305a DCC must be satisfied before a class action can be declared admissible. One of these requirements that the law imposes is the representativeness requirement. The requirement of representativeness prevents a foundation or association from instituting legal proceedings without the backing of a support base. It is up to the foundation or association to factually substantiate how many injured parties actually support the action in question and, accordingly, the scope of the claim it is representing. The court held that TPC had failed to do so. TPC acquired its support base by means of a system of “likes”; visitors to TPC’s website could express their support by clicking on a “like” button. The District Court held this to be insufficient for purposes of the representativeness requirement, in part because insufficient information was provided on the “like” page and no registration was kept of the data of the “likers”. The fact that TPC enjoys the support of privacy organisations does not automatically imply that it is sufficiently representative. TPC’s claim was declared inadmissible. TPC has since lodged an appeal.[2]
[1]Amsterdam District Court 29 December 2021, ECLI:NL:RBAMS:2021:7647
[2] On 28 April 2022, the CJEU handed down its judgement in the case of Meta Platforms Ireland (C-319/20). The judgment shows that collective actions ‘undoubtedly’ contribute to strengthening the rights of those involved. Therefore, strict (admissibility) requirements should not be imposed on interest groups. We will discuss this judgement in Q2022-2.
On 9 July 2021, the Procurator General of the Supreme Court of the Netherlands (“PG”) gave an advisory opinion in response to a judgment of the Court of Appeal of Amsterdam.[1] In short, the case in question concerns whether HP (a manufacturer and seller of printers and cartridges) acts unlawfully by installing so-called dynamic security software on its printers. This software blocks the use of non-HP cartridges.
The claimant is a foundation named ‘123inkt-huismerk klanten’ (the “Foundation”), which was founded by the directors of Digital Revolution B.V., a company selling printer cartridges blocked by HP’s software. The Foundation initiated a claim against HP on behalf of consumers who have bought these cartridges, demanding a ban on the use of the software in the HP printers. The Foundation opted to proceed via the assignment route, which involves the consumers assigning their claims to the Foundation. This meant that the Foundation acted as the formal litigant on behalf of these consumers.
Later in the proceedings, however, the Foundation tried to change its claim to one based on Article 3:305a Dutch Civil Code (“DCC”). In doing so, the Foundation tried to switch from being a formal litigant to a party by representation. According to the PG, a change in litigant status is in violation of due process. In line with the judgment of the Court of Appeal, the PG therefore concluded that the Foundation had no locus standi on the basis of Article 3:305a DCC.[2]
As to whether or not HP was acting unlawfully in using the software, the PG drew a distinction between printers sold before and after 1 December 2016. Regarding the printers sold before 1 December 2016, the PG concluded that the Foundation had no interest in banning the use of the software. This is because HP has removed the software from all these printers, meaning that non-HP cartridges are no longer blocked.
With regard to the printers manufactured after 1 December 2016, the PG concluded, in line with the Court of Appeal, that the use of the software was not necessarily unlawful. The PG argued that HP has a legitimate interest in the use of the software, i.e. to prevent the use of counterfeit cartridges and to avoid reputational damage and possible consumer claims. The PG considered it likely that consumers would attribute negative printer experiences (when using non-HP cartridges) to failure of the printer and thus to HP. Furthermore, HP informs all customers about the software installed in its printers and the consequences thereof. As such, the justification for the use of the software is that the customer has the choice of whether or not to purchase a printer with the dynamic security software built in.
Taking the PG’s conclusion into consideration, the Supreme Court ruled on 24 December 2021 that the complaints could not lead to the annulment of the Court of Appeal’s judgment (Article 81(1) of the Judicial Organisation Act).[3]
[1] Procurator General of the Supreme Court of the Netherlands 9 July 2021, ECLI:NL:PHR:2021:713
[2] Court of Appeal of Amsterdam 17 December 2019, ECLI:NL:GHAMS:2019:4502
[3] Supreme Court of the Netherlands 24 December 2021, ECLI:NL:HR:2021:1950
On 29 November 2021, the District Court of The Hague rendered judgment in a claim of two anonymised associations/foundations and one individual claimant v. the State and individual officials.[1] In preliminary relief proceedings, they sought the revocation of the marketing authorisations of BioNTech/Pfizer, Moderna, AstraZeneca and Janssen (developers of COVID vaccines). In these preliminary relief proceedings, the claimants envisage the immediate suspension of the vaccination campaign. They asserted that the recommendations of the Health Council of the Netherlands, in the context of which the State is informed about vaccinations, are unlawful. All three claimants were declared to have no locus standi. In the case of the foundation and the association, this was based on the exception of Article 3:305a(6) DCC.
The District Court ruled on the merits that the claimants’ claims in these preliminary relief proceedings were not directed against specific (COVID) measures of/decisions by the State. That circumstance alone implied that the claimants in these proceedings had no legally relevant interest in an assessment of the merits of the recommendations by the Health Council of the Netherlands. In addition, the District Court held that it is not the State but the European Commission that had the authority to revoke the marketing authorisation in question. Finally, an assessment of the merits of the recommendations would go far beyond the scope of a preliminary relief proceedings. Consequently, the claimants’ claims were denied. This decision was upheld on appeal.
[1]District Court of The Hague 29 November 2021, ECLI:NL:RBDHA:2021:12992
On 23 November 2021, the District Court of The Hague rendered judgment on the claim of two foundations and one association v. the State.[1] In these proceedings, the claimants sought an injunction prohibiting the State from allowing the export of (future) military goods and technology for the Egyptian State and/or the Egyptian navy. According to the claimants, Egypt violates human rights on a grand scale and the Egyptian Navy is an integral part of this regime. The (Dutch) State acted unlawfully by allowing and granting a permit for the export of these military goods to Egypt; there is a (highly) plausible risk that the proposed deliveries of military goods to the Egyptian Navy could contribute to or even be used directly in acts of domestic suppression, violations of fundamental human rights, violations of international (humanitarian) law and/or otherwise violate the obligations of the Netherlands under the Common Position and the Arms Trade Treaty.
One of the foundations was declared to have no locus standi because it failed to demonstrate that it meets the requirements of Article 3:305a DCC. The other claimants were however declared to have locus standi.
The District Court held that the claimants were unable to make a sufficiently plausible case that, given the current situation, the Minister could not have reasonably arrived at his decision to grant the current permits for the export of military goods to Egypt. The State monitors and takes all available information into account in the process of its decision-making. The State also made a plausible case that it carefully assesses the granting of permits. In addition, it was not asserted, nor is there any evidence, that other EU countries are currently declining to make similar deliveries to the Egyptian Navy. The claimants’ claims were therefore denied.
[1]District Court of The Hague 23 November 2021, ECLI:NL:RBDHA:2021:12810
